What shares are
What a contributor holds after contributing property, and how it differs from the share tokens of the Deed track. Nothing here is an offer or tax or legal advice; see Contributors.
Shares in Clear Properties
A contributor receives shares in Clear Properties, the company that holds contributed property.
- Issued by value. Property comes in at appraised value, and shares are issued one for each dollar of it. A property appraised at $437,000.00 becomes 437,000 shares.
- Nothing settled in cash. No cash is paid either way to balance the exchange.
- One pool. Shares are in a single pool of contributed property, not in the contributor's own building. Clear Capital's own position is in the same pool.
- The same terms for every holder. No preferred return and no priority for anyone, Clear Capital included. Nobody is paid before another holder.
- Pro rata. Whatever is distributed is shared in proportion to shares held. See What contributors receive.
As more property comes in, Clear Capital's share of the pool gets smaller.
The downsides
Contributing rather than selling has real costs. The list is the same for one property or a portfolio.
For larger contributions there is one more: early properties sit in a single corridor by design, and anyone assessing a contribution should take that concentration into account.
Not the same as fraction tokens
Shares in Clear Properties are not tokens, and no contract issues or records them.
The Deed track does have a way to split ownership of one asset into shares: fractionalizing, which issues a share token for each asset it locks. It is a different thing:
How fractionalizing and subdividing work is in Deeds and real-world assets, with the full account in Fractionalization and Subdivision.