Increasing the BA management fund
If necessary, the size of the management fund (MF) that was created during the Budget Automation tool's creation can be increased. This decision is made through a vote by the BA shareholders, a procedure that can be initiated by the manager or one of the BA personnel with appropriate rights. The decision to increase the MF is affirmed in case the vote was attended by shareholders owning at least half of the BA shares and if at least 75% of them voted "FOR."
A vote can be set only after the MF purse has a balance equal to the size of the current management fund.
When specifying the time of the vote, keep in mind that after the decision to increase the MF is made, the Budget automation tool will go into a special mode of operation where:
- personal orders to buy new shares for BA shareholders are automatically generated (the shares at the BA WMID's disposal do not participate in the MF increase)
- the MF is formed immediately after all the new BA shares are redeemed, but no later than after 30 days. At the end of the 30 day period, personal orders are annulled and the MF size is reduced by the number of unredeemed shares;
- funds from the shares being redeemed enter the MF purses, while all other funds transfers related to them are strictly restricted;
- there is also a restriction on the shareholders' capability to transfer and sell shares, and to post purchase or sale orders for the shares (it is only permitted to post sale orders on behalf of the BA WMID and only at nominal value).
Let's go through the process if increasing the management fund size using the LLC LablePrint BA example.
Let's recall that during the BA's creation, the size of the management fund was specified at 100 WMZ. And let's suppose that our company is experiencing a deficit of circulating assets and its management plans to double the MF size to involve new capital, which will come from selling shares to new shareholders.
Overall, the algorithm for increasing the MF consists of the following steps:
- collect a balance on the corresponding BA purse equal to the MF amount;
- initiate the voting procedure;
- vote on increasing the MF;
- buy out the additional MF shares at nominal value.
1. Setting a vote on increasing the management fund¶
Votes on distributing dividends can be initiated by the BA manager or a company employee from the personnel with full access rights to the 'Shares' category.
Let's begin by transferring 100 WMZ to the management fund Z-purse.
Then let's go to the Shares--votes tab and select the vote type "increasing the management fund".
Next specify the vote start date and time and the number by which the MF is to be increased (this should be a whole number between 2 - 10). Then press "Save".
A new record will appear in the votes table, and before the start of the vote (in "pending" mode) its parameters can be changed or deleted (see the "management" column).
To notify shareholders of the upcoming vote, you can use the automatic notifications option by going to the Shares--notification section and pressing "send" in the line of the current vote.
After the vote is created, it is no longer necessary to keep funds on the MF purse and they can be brought back to BA circulation.
2. Holding a vote on increasing the management fund¶
To participate in the vote, wait for it to start (to be in "not finished yet" mode), select it,
and press "FOR".
3. Administering a decision to increase the management fund¶
When the conditions specified for the vote on changing BA requisites are met (75% of the voices are "FOR" out of half of the voters), then after a short "vote count"
the decision is officially made.
After this, a personal order is automatically generated for every BA shareholder to buy out the additional shares, whose number is proportional to the number he owned before the fund's increase. This means that if a shareholder had 10 BA shares, then after the fund's increase by two times, he will receive an order for 10 additional shares, and if the fund was increased by three times, for 20 additional shares, and etc.
4. Buying out shares and creating the management fund¶
You can get a personal buy-out order at the Shareholder.ru service. Go to the Portfolio--Offers section, the "Purchase\Sale" tab, and select the name of the BA (in our case — LablePrint). To purchase the shares, press "Buy".
Next, select the number of shares to be bought (they can be bought in parts), place checkmarks to indicate that you accept the "Participant Agreement..." and have read and understood the BA Charter and Founding Declaration, and press "Pay".
On the next page, confirm your intention to buy the selected number of shares