Profits
If Consensus generates enough cash to pay its bills and dividends to the preferred shareholders, it will only be a short time before it becomes profitable. What should Consensus do with its profits?
I have alluded to several places to allocate profits. I will just summarize the profit-distribution mechanism, which will be incorporated into the legal articles governing Consensus:
- Accrued preferred share dividends
- Voluntary 20% tax of stated profits to the United Nations
- Current preferred share dividends
- Redeem some preferred shares
- Dividends to dividend-earning profiles, up to 50% of stated capital
- Donations to the Consensus philanthropic foundation
Item 2 is obligatory if the stated profits are positive and Item 1 is fulfilled.
If the high ring's short-term business objective is to reduce future preferred share payments, it can enact Items 3 and 4.
If the high ring wants to put some money into Consensus Foundation (Item 6), it first needs to pay dividends to the dividend-earning profiles (Item 5).
The high ring need not enact any of these steps. For example, if it deems a major investment in software is required, it can hold back on distributing all profits—even if this means accruing more preferred dividends.
The business plan asks early Consensus members to upgrade their profile to a dividend-earning profile for a small fee. The immediate purpose of this upgrade will be to generate cash for Consensus until advertising revenue can keep Consensus solvent.
A second reason, which is subtle yet very important, is that dividend-earning profiles will become the nominal owners of Consensus. It is this money that becomes the “profile equity” in the accounting statements.
While some early members upgrade their profiles mostly for altruistic reasons, CC will likely need money from members who are looking for a reasonable investment as well. The “50% of stated capital” will entice some of these profiles to upgrade. I will explain this supposed high rate of return a little later.
The next webpage is an example of how the profit will be distributed.
