The Company

Who: Companies are legal entities that are organized to pursue a business objective. Companies can pursue any form of business, but generally have a board elected by shareholders that selects executive officers that are responsible for producing profits and returning those profits to share holders. They typically employ labor to produce a form of capital or consumable goods that can be purchased by clients.

How does our system affect the company? Under our system the company inherits a new form of shareholders, the pref holders. The pref holders have no voting rights, but to get to benefit from the demurrage that is paid by the company in the form of pref payments.

The Company will have a new tension. If they hold cash it will demurrage, so the stock owners will want the company to put cash to work quickly, but they will also not want them to take undue risk.

In our opinion this is the price to be paid by a company for limited liability. We also believe this will lead to much more dynamic and adaptable companies. If a company must invest excess cash or risk losing it to demurrage they will be much more likely to find good, productive ways of putting the cash to work instead of letting sit in a bank vault. The work they do will much more directly impact their well being that the areas that a bank manager would have put the money to work in.