So, with regret, he had insisted that they find somewhere else to set up. He was feeling a bit guilty over throwing them out, and as he was very busy and not at all short of cash, he was willing to wait on payment for the last of the machines.
Which had led to this meeting of the “Sewing Circle.” (The kids had adopted the nickname as their own.)
“Grantville is out, till we’ve sold some sewing machines or gotten more capital from somewhere,” Sarah pronounced. “The rents are too high.”
“We may be able to use a couple of the storage containers for a while,” said David.
“Maybe so, but what we really need is a factory,” said Trent. “Over seventy-five percent of our parts are still hand-made. There are a lot of machines that we could make that would decrease the cost of production if we had the money and the room.”
“Some of the subcontractors have been asking about buying into the company lately,” said David. “It seems some of the other business have started offering profit-sharing and stock options. We don’t have any profits to share yet, but some of our suppliers figure we will.”
David was thinking mainly of Karl Schmidt. Other suppliers had shown interest, but Mr. Schmidt seemed a bit obsessive. At first he had thought that Mr. Schmidt was cultivating him for his mother’s sake; there was probably some of that in it, but that wasn’t all of it.
“So have some of the guys from the shop class,” added Brent.
“I think we should consider incorporation.” Sarah picked up her book bag and removed a notebook. Then handed David, who was closest, a typewritten sheet. “Read it and pass it on. What it is,” she said to the others, “is an outline of how I think we could incorporate. We set it up with a couple of hundred thousand shares. The first hundred thousand would be for the original owners. So we would each have ten thousand except for money bags here.”
She pointed to David, who buffed his fingernails on his coat and tried to look important. He managed to look silly, which was probably better for all concerned. “Who would have twelve thousand, and Mrs. Higgins would have thirty thousand and so on.”
“The other hundred thousand would be owned by the corporation. Which could sell it to raise extra money. Even at a dollar a share, even if we only sell a third of the shares, that’s a lot of money.”
“What about control?” asked Trent.
“We would probably keep it,” said Sarah. “Probably. Let me ask you something though. Why is control important?”
“So the grownups won’t take it away from us,” said Trent automatically.
“No. What are the grownups going to do? Buy up control so they can stop making sewing machines?”
“Tell us ‘Thanks, but we’re running things now. Go play with your toys.'”
“Right, and pay us each five percent of the profit,” Sarah answered. “David six percent and Mrs. Higgins fifteen percent. Altogether, with everybody, it’s fifty percent. It might be worth it to someone, but it’s not real likely. I figure we’ll probably sell half the hundred thousand shares. Which would still leave us and Mrs. Higgins with more of the stock than any other group, but even if we do lose control, we’ll probably get rich from it. So, if they want to tell us to go play with our toys, they are gonna have to buy us some really nice toys.
“There’s another reason we should incorporate, or at least, change it to a limited liability company.” She continued. “The way we set it up at first we are liable for any debts or damages. What if we get sued? It wouldn’t be so bad for us, we don’t have much many assets, but what about Mrs. Higgins? One of the things a corporation does, is limit the debt to corporate assets. That would mean they couldn’t take the storage lot, or Mrs. Higgins’ dolls as payment for the company’s debts.”
They spent the rest of the lunch hour talking about corporate structure.
October 9, 1631: Delia’s Garage
They had removed some of the production machines to the storage lot as a stopgap measure. Mr. Marcantonio had finished the last production machine they absolutely had to have, and they now had parts for several sewing machines. They had spent the entire time from when school let out trying to assemble one. Now it was dinner time, and they still didn’t have a working sewing machine.