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Subject: Clarification of RR purchasing Stock of a "Controlling Corporation" rss

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Pat Smith
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Edmond
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In Section 4.7.2 the rules state that "A corporation may not buy stock in a controlling corporation".

In the glossary the definition of a "controlling corporation" is "a corporation that owns the presidency of another corporation".

But the spirit of the rules (and some discussion here) seem to imply that this rule in 4.7.2 is meant to mean that a RR may not purchase stock from a company which in the controlling chain above the purchasing company.

I'm unclear if this means that
(A) no RR may purchase stock in another RR if that RR controls any other RR

-- or --

(B) You may purchase stock in another corporation (even if it has a presidency certificate) but may not purchase from any company which is in the chain which controls the purchasing company (eg, you may not purchase stock in the chain between you and your "president").

Thanks - pat
 
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Alex P
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I would think that if (B) was wanted, the rule would be "A corporation may not buy stock in its controlling corporation" or "A corporation may not buy stock in one of its controlling corporations".
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Pat Smith
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that makes sense..

I was trying to understand why you wouldn't be allowed to purchase a controlling corporation... Perhaps this is because it could lead to conflicts in the chain of control? Not sure, but perhaps after I get to play tomorrow I'll have a better idea.

pat
 
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J C Lawrence
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Campbell
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It would allow for loops in which two companies (or a larger ring) were mutually each other's owners.
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Stephe Thomas
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JC is right. Suppose the constraints in 4.7.1.and 4.7.2 aren't there. I float corporation A with just the presidency, and A floats B. Over the course of several rounds, B buys three shares in A. There is now a normal presidency shift, and A controls B and B controls A. Longer cycles of control (where A controls B controls C controls A, for example) are possible. The rules about not being allowed to buy shares in controlling corporations (intended to mean anywhere up the chain of control) and forcing sales of controlling corporation shares (ditto) are intended to reduce the number of ways this can happen.

It is still possible to end up with a cycle of control following either the Ferdinandea Secession or the Tuscan Merge, and possibly other merges, so the rules about treating cycles of control as more or less frozen have to be there. However, while it's a theoretical possibility, it's hard to see how rational play could lead to this point.
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Pat Smith
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Thanks everyone!

Those replies helped, especially Stephen's because I'd missed the rule requiring all corporations to sell any stock in it's controlling chain (which is intuitive but I had not seen and might not have followed if it didn't cause a control loop).

Playing this game this evening and looking forward to it.

pat
 
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