Difference between revisions of "Open Capital Partnership"

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=Description=
 
=Description=
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Once a Capital asset such as Land and Property is within an OCP there is no reason why it need ever again be sold, although Investees and Investors may both change over time in accordance with the OCP Agreement. Within the OCP Capital and Revenue are continuous: to the extent that an Investee pays Rental in advance of the due date he becomes an Investor."
 
Once a Capital asset such as Land and Property is within an OCP there is no reason why it need ever again be sold, although Investees and Investors may both change over time in accordance with the OCP Agreement. Within the OCP Capital and Revenue are continuous: to the extent that an Investee pays Rental in advance of the due date he becomes an Investor."
 
(http://www.moq.org/forum/chriscook/ifnotglobal.html)
 
(http://www.moq.org/forum/chriscook/ifnotglobal.html)
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=Typology=
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"There appear to be three classes of Land/Property Investment for which the OCP may be suitable:
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•“Commercial” based upon Hilton-type deals;
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•“Public” with potential to improve upon PFI/PPP type deals; and
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•“Personal” eg “Property Investment Partnerships”; developed below.
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'''[[Property Investment Partnerships]] (“PIP’s”)'''
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A PIP is an Open Capital Partnership between and one or more Investors and one or more Occupiers/ Investees of the property it acquires, eg a property purchased for £100,000, of which £80,000 is financed: the Occupier/Investor receives 20 shares and the Financier/Investor 80 shares at a value of £1k each. (or 200/800: 2000/8000 etc - it is the 20%/80% proportions which matter, there being no par or nominal value to these shares)
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There is an Exchange of Value: in return for the use of the Property, the Occupier(s) pays a Rental to the Investor (s) for the use of the Capital, eg a rent of £6,000 pa is agreed for two years for the above property: the Occupier pays net £4,800 pa; the Investor receives net £4,800 pa. After two years, the Occupier wishes to invest £12k in the Property: at £120k valuation he purchases a further 10%: at £96k valuation he purchases 12.5% and so on."
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(http://www.moq.org/forum/chriscook/ifnotglobal.html)
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[[Category:OpenCapital]]
 
[[Category:OpenCapital]]

Revision as of 01:35, 6 December 2008

Description

"An OCP is a “new” (since 6th April 2001) UK Limited Liability Partnership ("LLP") the purpose of which is to acquire and develop Capital assets in the UK or elsewhere.

An "OCP" has two Members:

(a) the "Investee"- or Capital User; (b) the "Investor" - or Capital Provider;

and the Investee has the right of indefinite use of the Capital for so long as he pays an agreed Rental.

Both the Investor and Investee may itself be a group of individuals or other legal entities. The OCP creates a form of Property of indefinite or indeterminate duration which is neither Permanent Ownership (eg freehold property or closed Equity “shares”) nor temporary Use (eg leasehold/tenanted property or Debt finance) but a hybrid.

Once a Capital asset such as Land and Property is within an OCP there is no reason why it need ever again be sold, although Investees and Investors may both change over time in accordance with the OCP Agreement. Within the OCP Capital and Revenue are continuous: to the extent that an Investee pays Rental in advance of the due date he becomes an Investor." (http://www.moq.org/forum/chriscook/ifnotglobal.html)


Typology

"There appear to be three classes of Land/Property Investment for which the OCP may be suitable: •“Commercial” based upon Hilton-type deals; •“Public” with potential to improve upon PFI/PPP type deals; and •“Personal” eg “Property Investment Partnerships”; developed below.


Property Investment Partnerships (“PIP’s”)

A PIP is an Open Capital Partnership between and one or more Investors and one or more Occupiers/ Investees of the property it acquires, eg a property purchased for £100,000, of which £80,000 is financed: the Occupier/Investor receives 20 shares and the Financier/Investor 80 shares at a value of £1k each. (or 200/800: 2000/8000 etc - it is the 20%/80% proportions which matter, there being no par or nominal value to these shares)

There is an Exchange of Value: in return for the use of the Property, the Occupier(s) pays a Rental to the Investor (s) for the use of the Capital, eg a rent of £6,000 pa is agreed for two years for the above property: the Occupier pays net £4,800 pa; the Investor receives net £4,800 pa. After two years, the Occupier wishes to invest £12k in the Property: at £120k valuation he purchases a further 10%: at £96k valuation he purchases 12.5% and so on." (http://www.moq.org/forum/chriscook/ifnotglobal.html)