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Text1="Note: The routine has been adjusted since this article was published. This article will soon be upgraded.<p>The stock market concept includes money transfers between household. <a href=\"../05/22004.html\">You can read about individual accounts here</a>.<p>Not long ago Simmerville hood joined the regional Mazaloom Stock Office. Our local businesses can now benefit from the trades of shares, simply by being a corporate company instead of a personal business. Several businesses already took this opportunity to find fresh capital for various reasons or to get a different owner structure. We think it's on time that we share the concept with other hoods!";

Head2="The Stock Market";
Text2="Before I tell you how to proceed, let's say something about the Stock Market in general. The greatest one is the Sim Nation Stock Market which is a very busy financial central where shares change owners. We can say the stock market has two main purposes: Bring fresh money to companies, and allow for investors to make worthy investments. The stock values are updated frequently in order to give the investors a chance to follow a company's development.<p>In your own region, business life is probably a bit calmer, so you might like to have your local Stock Market that focus mostly on local companies and local investors. Less busy, more cosy! Time proceeds differently all over SimNation, making it easier to maintain a stock market where companies and investors live in the same district.<p>Before we go on, please check out the corporations currently registered with our Mazaloom Stock Office. The column 2nd to right shows the current value per stock. The far right column shows value change since the previous update. Also the business rank might be of interest. All this information can be gathered in a text document or on a piece of paper. You can even make notes in the community lot's bio field. Just make sure to set some local rules to avoid wasting time on debating details later on (read on for examples).";

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Text3="You can of course build a stock office at a community lot. It's not needed though, cause trading shares will need to be handle aside of that lot anyway. Our Mazaloom Stock Office is located somewhere downtown, but only accessible by mail and phone. You might think that running a local stock market is very time consuming, but you can make it as simple as you like. Simmerville intends to spend less than 15 minutes per human month maintaining the stock rates for 5-10 companies.";

Head4="Gobelin Fashion - an example";
Text4="<img align=right border=1 hspace=10 src=\"img/22001c.jpg\">Why would you want to incorporate your business? The easiest way to explain is to ask the owner of a local clothing store named Gobelin Fashion. This business is one of our oldest, established back in the days of TS1. The current owner, Baltus Gobelin, inherited the business from his father. So why did he take the step to the stock market?<br><i>- When we signed the OFB deal the store had to be built up from zero. Now that my bank loan is due, I think converting the store to Gobelin Fashion Inc. is a perfect solution. It means I can realize some of the value by selling some shares to others, via Mazaloom Stock Office. It also means that I will earn less from the daily activities, but the total situation is a lot better for me.</i><p>Other reasons for incorporation would be to expand a business or if a business has multiple owners. It also makes inheritance a lot easier because the company values can be split without selling the business.<p>When Baltus Gobelin decided to register Gobelin Fashion with Mazaloom Stock Office, the community lot value was §77.450. He opened an individual account for the company and made a deposit of §2.550 - making the total value of the new corporation to §80.000. Like you can see above, the total value of §80.000 is split on a total of 80 shares, each §1000. You can say that the Stock Office bought all those shares for §80.000, then Baltus Gobelin bought 60 of them back (§60.000), meaning he now holds 75% of the new company and is still in charge. In addition he got to keep §20.000 in cash.<p>His brother Bart Gobelin and Bart's son Stephan Gobelin bought 10 shares each. This way all shares are sold and the Gobelin family's traditional clothing store is still kept in the family.<p>Right now each share is worth §1000, but in 5 simdays the company's value will increase or decrease, depending on how successfully the business is run.<br><i>- I am pretty sure that the value of each stock will increase because Gobelin Fashion still has got potential. And even if the value is decreased, I'm sure that my brother and nephew will keep their shares because of the family tie.</i>";

Head5="The roles - deed owner versus share holders";
Text5="While the share holders own the company, the deed owner owns the right to manage the business. The lot value belongs to the owner(s) and not the manager.<p>Quite often the deed owner will also hold the majority of the shares. This makes management easier because the one with the most shares will make the decisions.<p>In order to register a new corporation the deed owner must hold at least 50% of the shares himself, as a start capital. It would not appeal much to investors if they were supposed to invest more than the deed owner was willing to risk. The 50% rule is optional and could anyway be ignored after 5 simdays.";

Head6="The daily management";
Text6="A business or a store will be run just like it used to be run. The deed owner will still be interested in as much profit as possible, but now he must share with the share holders. The deed owner must put 50% of the daily profit (or loss) on the company's account. If one day brings in §4000 net, the deed owner must transfer §2000 to the company's account. Also a negative result must be shared equally between the deed owner (manager) and the company's account (share holders) by transferring half of it from the company's account to the deed owner's individual account.<p><img align=center hspace=10 vspace=10 border=1 src=\"img/22005b.jpg\"><p>It's easy to keep track on these things if you make notes in the community lot's bio every simday. The company's total value will be the business' net worth (§68885) plus the account (§11173). Above you see the current notes for Gobelin Fashion. On day 61 the profit was only §146, meaning §73 was transferred from the deed owner's account to the company's account.<p>Every simday, Gobelin Fashion must report to Mazaloom Stock Office with information on the total value. Reporting can take place as often as you like, perhaps only every 5th simday, to save some administration. In Simmerville the stock office is updated daily but open for transfers only every 5th simday.";

Head7="What's in it for the deed owner?";
Text7="As long as a company makes some money, both the deed owner and the share holders will benefit economically. This is the deed owner's job, and he must be able to make a living. Even if he is to keep only 50% of the daily profit, it will normally be more than enough to lead a normal sim life.<p>With help from the investors, he needs only half the capital to get started or he can start something bigger. Selling more expensive items from the start will cause a bigger profit much earlier. Existing businesses can expand or start a chain of businesses within the same corporation. The business concept will often be based on the deed owner's basic concept and will normally be in his interest. Anyway, with the capital and a successful company, he has a lot more possibilities than if he run a personal business.<p>The drawback for the deed owner is that he also represent the investors' interests, meaning he must work to increase the business value. This means that he might be forced to use the cash reward perks instead of more personal perks like connections and motivation.";

Head8="What's in it for the share holders?";
Text8="The share holders must make enough money to find the investment worthy. Most businesses will build nicely when they are new. But at some point the positive development might slow down, and even if there is still a positive result, the investors might find better alternatives. That is when they sell out and the company might get harmed.<p>Share holders will release their win when they sell their shares. In other words, it is normally a long term investment. If a sim buys 10 shares for §10000 and 20 simdays later sell them for §25000, the pay off will be pretty good and worth waiting for.<p>You can of course admit them a small dividend (interest) every 5th simday or even daily, charging the company's account. But often the dividend will be small, and it all causes a lot of administration. It's up to your local office and/or the owners, though.<p>Note that it is easier if all your companies follow the same rules, but you might find it more interesting if you allow each company to decide if they like to pay the share holders some dividend every X simdays. Remember that the Sim owning the most shares will decide. Will he want to pull out all the money he can as soon as possible, or will he rather wait? Taking out dividend will reduce the company's account and therefore also the value of the shares.<p>In Simmerville all companies must obey the same rules, and we will allow but not force dividend.<p>The share holder's drawback is the risk of losing money. Most shares will build in value, but most investors will always look to alternatives. Making less money than another stock will mean a loss. There is also the risk that the corporation is forced to close down.";

Head9="When a stock holder sells out";
Text9="Sooner or later one of the investors will sell, and there might not be anyone to buy the available shares right away. If the office is open only every 5th simday - what happens to the company? This is where the Stock Office comes in as a buffer. They will accept to keep up to 50% of the shares, but maybe only for a limited period?<p>If a share holder sells 80% of the company's shares, the company will need to find investors to make sure that not more than 50% is free. If they don't manage this, the Stock Office will refuse to keep the company listed, and the company must buy all available shares and eventually convert to a personal business instead of a corporation.";

Head10="When the deed owner sells the deed";
Text10="If the deed owner wants to step back, which he can do at any time, the deed will be sold back to the community. The value of the company does not belong to the deed owner though, so the entire sum must be transferred to the company's account. Now it's very important to find a new deed owner in a hurry, because each simday without a deed owner, the company will not make money, and the value of the shares will drop compared with other companies. Normally the investor owning the majority of the shares will find a new deed owner.<p>Note that in these terms, being a deed owner does no longer involve investments, it's more like a job where the sim will be able to make good money. You might want rules like ie a deed owner must own at least 50% of the shares, but in Simmerville we have no such rule. It seems easier to separate the deed owner role and the share holder role completely.<p>---<p>That's all for now. This is a very wide subject, covering so much. Even if you did not get all your questions answered, I hope this will inspire your local businesses to a different approach. Any questions can be posted to the right on this page, and I will add my reply together with your comment.";

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Photo="Mazaloom Stock Office will be updated every 5th simday <a href=\"../../services/sc_ft_bank/index.html\">here</a>!";

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