The basics of Imperial Finance:

A financial transaction occurs when two financially recognised bodies undertake to exchange a sum of money for some service or tangible asset. Payment of monies may be in advance or in arrears, but unless otherwise specified in the undertaking, normal transactions must be completed within one month of the commencement.

If completion of a transaction is delayed beyond its agreed completion date, the creditor of the transaction may charge the debtor lateness fees of 5% per month, or more or less if specified in the initial undertaking, until the transaction is completed, or a financial judgement is successfully sought.

Where a transaction remains delayed for more than 6 months after its due date, the creditor may seek a financial judgement against the debtor. In this case, an Audit of the Debtor must take place, and if it is the professional view of the auditor that the debtor will not be able to complete the transaction, then the transaction will go to Court under a petition to declare the debtor insolvent. If, in the professional view of the Auditor, the debtor is able to complete the transaction, then a petition will go to court to require the immediate completion of the transaction with all late fees, professional audit fees and court fees. Failure to complete the transaction in this case results in automatic seizure of assets and services to the value of the completed transaction with all late fees and professional audit fees and court fees, and seizure fees.

Complex Transactions may be undertaken that involve staged exchanges of monies for services or tangible assets. In the case of such Complex Transactions, each agreed stage of the Complex Transaction is to be treated as an individual financial transaction in terms of completion dates, and late fees.

Financially recognised bodies within the Empire:

The Empire (Imperial Exchequer): Responsible for all Military expenses, Senate expenses, State expenses. This is administered by the Chancellor of the Imperial Exchequer, in whom Financial Responsibility ultimately rests. However this responsibility is deferred down through the chain of authority within the Imperial Government to the duly appointed individual who authorised the spending. Spending by the Imperial Exchequer must be authorised by a duly appointed free person be it military or citizen – if a slave authorises spending, then the authority actually comes from the direct owner of the slave. In the case of the actual Imperial Households, that authority rests in the Keeper of the Imperial Purse, an Imperial Appointment under the recommendation of the Chancellor of the Imperial Exchequer. Incurring a financial judgement against the Imperial Exchequer is an offence punishable by lifetime slavery for the responsible individual's entire personal household and forfeiture of all an individual's assets.

Temples: Each Deity has their own Temple, all of which are exempt from taxation. All property and moneys are held in common by the Temple, and are administered by the Temple authorities. Individual members of a Temple have no rights to own funds or properties. Financial Responsibility for debt reverts to the member(s) of the Temple that authorised the spending. Temples must be Audited annually, and if in the professional view of the Auditor, the Temple has excessive wealth for its needs, a petition may be made to Court requiring the Temple to reduce its wealth.

Guilds: These are non-profit organisations which exist to regulate crafts and professions, to set the prices that can be charged by crafts and professions, and to train individuals to undertake the crafts and professions, and as such are exempt from taxation. They are financed through the system of levies on their members, and they are administered by their elected officials. Financial Responsibility for debt rests in the elected officials of the Guild who authorised the spending, deferred to any duly appointed officials. Guilds must be Audited annually, and if in the professional view of the Auditor, the Guild has excessive wealth for its needs, a petition may be made to Court requiring the Guild to reduce its wealth.

Educational Establishments (Colleges and Schools): These are non-profit organisations which exist to provide education to children and adults, in academic and professional subjects. They can be established for general education or for a specific subject, and are regulated through the Temple of Teaching. They are financed by the charging of fees to the students who attend them, though in many cases these fees are in fact taken up by the Guild for whom the training is relevant, or the City, Town or Rural council for which the school is providing general education. Financial Responsibility for debt rests with the elected Governors of the school or college, deferred to any duly appointed officials. Educational Establishments must be Audited annually, and if in the view of the Auditor, the school or college has excessive wealth, then a petition may be made to the Temple of Teaching requiring the School or College to reduce its wealth.

City, Town, and Rural District Councils: These bodies are non-profit organisations formed as a result of the 10th, 12th and 13th Senate Declarations, to provide certain administrative services within residential areas in the Empire. Financial authority rests in the elected officials, but may be deferred to the duly appointed officials who authorised the spending. Councils must be Audited annually, and if in professional the opinion of the Auditor the Council has excessive wealth, then a petition may go to Court to have the excess returned to the populace who paid it. Similarly, if there is a need for expenditure that is beyond the means of the Council, the Council can petition the Imperial Exchequer for additional funds to meet the need, in advance of actually authorising the spending. Funds granted by the Exchequer must be used for the purpose they were petitioned, or returned to the Exchequer.

Wholly Owned Companies: A Wholly Owned Company is a body formed under the provisions of the 5th Imperial Decree where the entire body is owned by one single other financially recognised body. Administration of the Company is by its owner and those Employees appointed by its owner to do so. Financial responsibility for the Company rests with its owning body, though this may be deferred to certain employee(s) of the company depending on the outcome of any specific judgements against it. Wholly Owned Companies must be Audited annually, and are liable for company taxes as indicated in the 11th Imperial Decree. They are also liable to pay to the Imperial Exchequer all employee taxes collected under the 1st amendment to the 5th Imperial Decree. When funds are transferred from the company to its owning body, that transfer is counted as income for the owning body and may be liable to taxation. When funds are transferred to the Company from its owning body those funds are counted as investment, and are not liable to taxation.

Partnerships: A partnership is a Financial Organisation where a group of free individuals agree to pool their resources and trade together as one body, but with no other owners. Financial responsibility rests with the partners, in proportion to the terms of their partnership. Partnerships must be Audited annually, but the individual partners are taxed as individuals on the income they personally derive from the partnership.

Private Companies: A Private Company is a body formed under the provisions of the 5th Imperial Decree, comprising at least three shareholders, but where more than 50% of the company is still owned by a single other financially recognised body. Administration of the Company is by the majority shareholder, who is referred to as the chairman of the company and those employees appointed by the chairman to do so. Financial Responsibility rests with all the owners of the company, though this may be deferred to certain employee(s) of the company depending on the outcome of any specific judgements against it. Private Companies must be Audited annually, and are liable for company taxes as indicated in the 11th Imperial Decree. They are also liable to pay to the Empire all employee taxes collected under the 1st amendment to the 5th Imperial Decree. When dividends are paid from the company to any of its shareholders, those dividends are counted as income for the owning bodies and may be liable to taxation. Shares in the company may be traded through a professional broker as assets at a value determined by the balance sheet of the company. Funds may be injected into the company by its shareholders, through the issuing of new shares, but unless all shareholders simultaneously inject a proportion of funds equal to their relative shareholding, then the relative distribution of their shareholding will be changed. If, during such a share issue, the proportion of shares that the majority shareholder holds falls such that it is no longer greater than 50%, then the Company must convert to a Public Company, with the appropriate changes in Administration and responsibility.

Public Companies: Public Companies are companies where no single recognised financial body holds more than 50% of the shareholding. Administration of the company is by a board of directors, who must all be shareholders, and who are elected annually at a meeting of shareholders on the principle of one share one vote. There must always be an even number of directors, at least 4 and no more than 16, with the number of directors also being decided at the shareholder's meeting. Operating decisions of the board must be agreed by a simple majority, with the chairman of the board (elected at the shareholder's meeting) having a casting vote in the event of a tie. Financial responsibility for the company rests with the board, though that may be deferred to certain employee(s) of the company depending on the outcome of any specific judgements against it. Public companies must be audited annually, and are liable for company taxes as in the 11th Decree as well as for the employee taxes collected under 1st amendment to the 5th Decree. When dividends are paid from the company to its shareholders, those dividends are counted as income for the shareholders and may be liable to taxation. Shares in the company may be traded on any Imperial Stock Market, at a value determined by the market, and their value may rise or fall in ways unrelated to the performance or asset value of the company. Investment in the company by the selling of new additional shares may take place at the instruction of the board, but this will potentially affect the proportions of shares held by existing shareholders, and may also affect the value of shares. In the event of a single financially recognised body attaining ownership of more than 50% of all shares in the company, the company ceases to be public and becomes a Private Company under the control of its majority shareholder, with the board of directors being dissolved.

Non-Profit organisations: A non-profit organisation is a body that is formed as a result of a petition to the Emperor, and is specifically charged with some purpose or function which fulfils a social or special interest need in the Empire. It is not subject to taxation, but it must collect personal taxes from any employees it has and pay them to the Imperial exchequer as in the 1st amendment to the 5th Decree. Administration of non-profit organisation is by a group of trustees who are elected by a free vote of any concerned citizens that choose to attend the annual meeting of the organisation, and the trustees cannot be employees of the organisation. The activities of the organisation are funded by monies which are gifted to the organisation by any individual or financially recognised body. Financial responsibility for the organisation rests with the trustees, and is not limited, though it may be deferred to certain employee(s) of the organisation depending on the outcome of any specific judgements against it. Non-profit organisation must be Audited annually, and the results of the audit, along with a report on the activities of the company over that year must be submitted to the Imperial Exchequer. Money cannot be taken out of a non-profit organisation as dividends – all spending must either be on administrative services or on the stated aims and activities of the company, and excessive wealth in the organisation may be subject to windfall taxation.

Banks: The Imperial Throne recognises the need for bodies to exist who's duty is to secure the financial assets of other bodies, keep them in a safe manner, allow for the safe concluding of transactions involving large quantities of money and to provide security for the savings of the citizenry against the economics of the future. It is therefore decreed that in exception to the 19th Imperial Decree, by petition to the Imperial Throne, companies may be formed to fulfil the functions of Banking within the Empire, and that such companies may pay interest to their depositors at an annual value up to the determined rate of inflation without such interest being liable for taxation. Further interest, if paid, would be liable for taxation. It is decreed that banks may charge fees for undertaking their services. Banks are required to keep strict and accurate records of all their depositor's accounts, and to keep strict records of their own finances, which are liable to be Audited at any time and frequency, at the instruction of the Imperial Exchequer. Banks may use the monies which they hold to undertake trade and investment, thus converting physical money into other assets, but must at any time be able to allow any depositor to withdraw up to ᴆ10,000 of their funds on a single day, and their entire deposit of funds within a week's notice. Failure to be able to do this will render the bank insolvent. Profits derived from trading with deposited cash are to be used to fund interest payments, and the excess above interest payments become income for the Bank, and are liable for Company Taxation. In regard of Administration and responsibility, a Bank is treated as treated as a Wholly Owned, Private or Public company, depending on the specifics of its ownership.

Stock Markets: These are companies formed by petition to the Imperial Throne, that specifically undertake trading in the shares of other public companies, by determining the daily price of such shares, and handling buying or selling of such shares. In all instances a trade in shares of a public customer must either be a sale to or a sale from a Stock Market, and income for the Stock Market is derived from the difference in buying and selling prices, and from fees that may be charged for undertaking the transaction. Public Companies which do business anywhere on the Primal Realm must have their shares traded on the Eboracum Stock Market, and any public company which does business on multiple shadows must have it shares traded on the New Yorvik Stock Market, in addition to any other Stock Markets. In regard to the Administration and Responsibility of Stock Markets, they are companies to be treated as any other trading company.

Financial Professionals (auditors, brokers, fund managers etc.): Individuals who work in the Financial Industry, either as Bankers, stock market traders, accountants, professional fund managers, or other suchlike, have a greater responsibility in Finance than just for their own funds. They are therefore held to a greater accountability, and if another financially recognised body becomes insolvent as a result of the activities of a Financial Professional, then that Financial Professional may, depending on the specific judgement of any individual cases, share some or all of the responsibility and penalty for the insolvency.

Aristocrats: Aristocrats are individuals who have been granted a title by either the Emperor or by Senate, and who therefore become financially recognised individuals, regardless of what their state would otherwise be within the Empire (e.g. a Priest who becomes an Aristocrat becomes entitled to own property and assets outside of the control of his Temple). They are paid a stipend from the Imperial Exchequer that is not liable to taxation. However, this is done as a vehicle to encourage the active flow of money within the Empire, through existence of more individuals with significant disposable funds available for spending. Therefore, it is Decreed that unless the gross spending of any aristocrat is at least two thirds the amount paid in stipend per year, the excess cash not spent be returned to the Imperial Exchequer at year-end. Aristocrats are entitled to have other income besides the Imperial stipend, upon which they must pay personal taxes, and which is not relevant for minimum spending limits. Aristocrats are responsible for their own finances, and are liable for any debts they incur. The Imperial stipend may be taken into account when Auditing the ability of an aristocrat to pay a debt, but if an Aristocrat becomes fully insolvent and is sold into slavery, the stipend is cancelled permanently.

Citizens: Free citizens are responsible for their own finances, and for the finances of all their dependants. They may own assets, property, and may trade their services to generate income for themselves and their dependants, which is liable for personal taxation.

Other Individuals: Dependants are recognised as being able to own assets, but not property. However, they fall under the responsibility of some other financially recognised body with regard to the undertaking of transactions, and the incurring of debts.

Trusts: A Trust is a financially recognised body where an accumulation of assets or property is administered by a group of trustees, on behalf of some other individual, who for whatever reason is temporarily unable in law to be financially recognised body. Examples of Trusts would be those for dependant widows, orphans or slaves, but this is not an exclusive list. The trustees are appointed by order of Court, and are Financially Responsible for debts incurred by the Trust, initially out of funds of the Trust, but if the Trust becomes insolvent, out of their own resources. It is the duty of trustees to accumulate wealth within the Trust, income for which is liable for taxation in all cases except slave trusts. Trustees may charge fees of the Trust for their services based on a percentage of growth of the Trust, Decreed at this time to be 1% per year.

© Tim Hart 2010
For further details contact the GM.