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How to Choose the Best Legal Structure for Your Business – Pros & ConsAre you thinking about turning your latest idea into a business venture? You’ll need to do a lot of work to get off the ground. The Small Business Administration‘s 10-point checklist for budding entrepreneurs is a great place to start. It ticks off a list of crucial to-dos for anyone in the early stages of business formation:Brainstorm and write your business planLook for assistance and training in your industry or area of expertiseChoose a business location (domicile and physical location, if you’re not working out of a home office or coworking space)Find startup financing for your small businessDetermine your company’s legal structure and set up your business with Rocket LawyerRegister your business name (“Doing Business As”)Get a tax identification number and ensure you’re in compliance with local, state, and federal tax regulationsGet a business license and permits, if requiredLearn your obligations vis-a-vis hiring employees, including responsibilities under the Fair Labor Standards Act and what to do if an employee files an FLSA complaint against youFind local assistance from the SBA and local business resourcesWas I in charge at the SBA, I’d add another point: Keep looking for ways to reduce your small business expenses. That’s more of an ongoing obligation, but its importance is impossible to overstate, and it’s never too early to get started.In any event, number five on that list (determining your company’s legal structure) is crucial, with plenty of pitfalls to avoid. Let’s look at the most common business structures available to U.S.-based entrepreneurs – and a handful of less-common structures too. You’ll learn the basic attributes, advantages, and disadvantages of each structure. Afterward, you’ll be able to properly assess which option is right for you.Sole ProprietorshipA sole proprietorship (sole prop) is the simplest and least formal business structure available to U.S. business owners. By definition, it’s also the least conducive to growth. All sole props share some essential attributes:Single Owner and Operator: A sole prop is owned and operated by one person only. Sole proprietors are free to hire employees and retain contractors, but they can’t add partners or issue stock to shareholders. If you want to bring new owners into the fold or sell equity in exchange for funding, you need to reorganize it as a partnership or corporation.No Formal Incorporation: Sole proprietorships aren’t formally incorporated as corporations or organized as partnerships. Sole props that do business under a fictitious name, rather than the operator’s name, typically register those names with state authorities. (These names are known as “Doing Business As” names, or DBAs.) If your sole prop does business under your name, you don’t need to register a DBA.Tax Identification: If you’re your sole prop’s only employee, you can file taxes using your own Social Security number. If you hire employees, you’ll need to get an Employment Identification Number (EIN) from the IRS. This costs nothing and takes only a few minutes.Separate Finances: Sole prop owners aren’t legally obligated to maintain a wall of separation between their personal and business finances. However, it’s highly advisable that you do so, for multiple reasons: to determine that your business is profitable, to keep track of your income and expenses for tax purposes, and to provide potential creditors with a precise accounting of your company’s finances. Set up a business bank account and apply for a small business credit card. Route all income to the former and use the latter for business expenses only. This kills two birds with one stone: keeping your business finances separate while building credit.Pass-Through Taxation: Sole props do not file taxes separately from their operators. As the owner of a sole prop, you’ll attach Schedule C or Schedule C-EZ (Form 1040) to your personal tax return. If your enterprise was profitable during the tax year, you’ll likely be liable for self-employment tax. You’ll report self-employment income and calculate self-employment tax on Schedule SE (Form 1040). If you expect to owe more than $1,000 in tax after subtracting any withholding taxes, and if your withholding taxes comprise less than 90% of the taxes you expect to owe in the current tax year or 100% of the prior tax year’s tax obligation, you’ll need to make quarterly estimated tax payments. For more detail about this and all tax questions, consult our Tax Guide or a tax advisor.Pros of a Sole ProprietorshipSimplicity. It’s super easy to set up a sole proprietorship. You don’t need to file articles of incorporation, draft an operating agreement, or make public financial disclosures. In many cases, you don’t even need to register a company name. You should keep a precise accounting of your business finances, but that’s not legally required.No Double Taxation. Sole props are taxed on a pass-through basis, meaning your business income is combined with nonbusiness income for tax purposes. Your sole prop doesn’t pay taxes on business income that then passes through to you as taxable personal income, a circumstance known as double taxation. If you sell taxable goods or services, you may be required to register with the appropriate tax authorities and pay local and state sales tax.Cons of a Sole ProprietorshipPersonal Liability for Business Debts and Obligations. The glaring disadvantage of a sole proprietorship is the operator’s personal liability for any debts or obligations incurred by the business. For instance, if you purchase equipment on credit, then hit a rough patch, and find yourself unable to meet the vendor’s payment terms, the vendor may have the right to seize your personal assets (including your personal bank account, house, and car) to satisfy the debt. Shareholders in incorporated entities aren’t personally liable for business debts.Reticent Lenders. Unless your sole proprietorship has substantial assets to put up as collateral, it’s not likely to qualify for loans from traditional lenders. This is especially true for newer entities and owners with spotty personal credit. You may have more luck with nontraditional online lenders, many of which market to sole props and smaller corporations. The devil’s often in the details, however – these loans typically come with high-interest rates and unfavorable terms. You’re better off relying on personal savings, loans from family and friends, and other nontraditional startup financing options.Potential for Greater Tax Liability. Sole props are taxed on a pass-through basis. When they’re profitable, they increase their owners’ total taxable income. A big enough increase in your taxable income bumps you into a higher tax bracket and raises your marginal rate, reducing your take-home pay proportionally. While this sounds like a good problem to have, it’s not ideal for sole proprietors who operate their businesses for side income and rely on salaries or hourly wages for the bulk of their income. Neither is it ideal for sole prop owners who set aside substantial fractions of their business income to finance equipment, inventory, or unexpected purchases.PartnershipThink of a partnership as a multimember sole proprietorship. The Small Business Administration describes partnerships as “a single business where two or more people share ownership” and “each partner contributes to all aspects of the business, including money, property, labor or skill,” while sharing “in the profits and losses of the business.” Like sole proprietors, partners are by default personally liable for partnership debts and obligations.Like sole proprietorships, partnerships are informal. “Generally, partnerships do not require any filings with state agencies,” says Shawn Toor, a business law attorney with Seattle-based Williams Kastner. “A partnership can be formed merely by the act of two or more people agreeing to carry on business and share in the profits and ownership control.”Partnership AgreementsMost partnerships are controlled by contracts known as partnership agreements. Partnership agreements govern matters like:The partnership’s legal name and DBA nameThe partnership’s term – either time-limited or in perpetuityGeneral-purpose of the partnership – the business activities in which it’ll engageInitial contributions of each partner, such as cash and property, and the installment schedule on which those contributions will be madeProcedures for future contributions to the partnershipProcedures for admission of new partnersProcedures for distribution of profits and losses to each partner, including frequency and proportionalityManagement duties of each partnerVoting procedures – which matters require a vote and the number or proportion of votes needed to decide in favorProcedures for the sale or transfer of a partnership interest (buy-sell agreements)Procedures for the expulsion of a partnerProcedures for continuing or dissolving the partnership upon the death of a partner – often included in buy-sell agreementsProcedures for dispute resolution, such as mediation or arbitrationYou can find generic partnership agreement templates online and modify them to your partnership’s needs. However, these templates frequently leave out important eventualities that could affect your interest in the partnership – or the partnership’s very existence – going forward. For instance, a carelessly drafted partnership agreement could allow one partner to unilaterally bind the entire partnership, possibly against the other partners’ wishes.It’s therefore highly advisable to retain an attorney to draw up a customized partnership agreement on your behalf. If your budget doesn’t allow for this at the outset, revisit the situation as soon as possible. Your partner(s) should be amenable to creating a customized partnership agreement to protect their own interests.There are three main types of partnerships. You’ll designate which type of partnership you’ve chosen in the partnership agreement.General PartnershipA general partnership is the most common and straightforward type of partnership. Typically, general partners share equally in the partnership’s profits and liabilities, take on equitable duties, and have equal voting rights. The partnership agreement controls situations in which partners’ interests and duties diverge. For instance, many partnerships assign executive duties to a single managing partner. Others dole out profit shares according to seniority, with longer-serving partners taking a greater share of the entity’s net income.Limited PartnershipA limited partnership (LP), also known as a limited liability partnership, allows for a class of “limited partners” who essentially function as passive investors in the venture. Limited partners have little or no influence on the partnership’s decision-making processes and day-to-day management activities. They are not personally liable for the partnership’s debts or obligations. And they receive profit or loss shares proportional to their interest, which is usually smaller than that of general partners.LPs are more complicated than general partnerships. They are suitable for larger, capital-intensive ventures that attract lots of investors – not so much for small, two- or three-person ventures, which are easier to manage through general partnerships.On the bright side, they’re more discreet than traditional corporations. “The LP agreement is typically a privately signed document,” says Jason Powell, a corporate law attorney at Missoula, Montana-based Bjornson Jones Mungas, PLLC. “[LP agreements are] usually not recorded or available to the public, which allows for anonymity if desired.”Joint VentureA joint venture is a time- and scope-limited general partnership. It’s ideal for one-off projects that require pooled resources, such as commercial real estate development. Partners in a joint venture can convert the enterprise into a traditional general partnership by amending the partnership agreement.Pros of a PartnershipPooled Resources and Shared Responsibilities. Unlike sole proprietors, partners can pool resources without seeking outside investors or taking on debt. They can also share day-to-day management and executive decision-making responsibilities commensurate with their credentials and abilities.No Formal Incorporation Required. Unlike corporations, partnerships aren’t required to file articles of incorporation. For a variety of reasons, most partnerships are governed by written, legally binding partnership agreements to which all partners consent, but these agreements don’t have to be reviewed by or filed with local or state authorities.No Double Taxation. Partnership income is taxed on a pass-through basis. Partnership income is reported on Schedule K-1 (Form 1065), which the partnership must furnish to each partner by the annual deadline. Each partner adds his or her share of the partnership income, as reported on Schedule K-1, to his or her personal income from other sources.Flexible Time Horizon. Partnerships do not necessarily exist in perpetuity. If you need to pool your resources with other investors for a single project or venture, but have no wish to associate with them once the project is completed, you can create a joint venture specifically for that purpose. When the project wraps up, the partnership dissolves, and you and your partners part ways.Cons of a PartnershipPersonal Liability for Business Obligations. As with sole props, the greatest disadvantage of a partnership is personal liability for business debts and obligations. Your share of liability is proportional to your interest in the partnership – if you own 30% of the partnership, you’re responsible for 30% of its liabilities.Potential for Greater Tax Liability. Like sole prop income, partnership income is treated as personal income. If your partnership is profitable, your personal income will increase, potentially raising your marginal tax rate, increasing your overall tax burden, and reducing your usable cash on hand.Requires a Formal Agreement. Though partnerships don’t require formal articles of incorporation, virtually all are governed by partnership agreements. These contracts can be quite complex, and while it’s possible to modify a serviceable template at low cost, it’s expensive to hire an attorney to draft a customized agreement that accounts for the widest possible range of eventualities.Dependent on Human Relationships. Successful partnerships depend on amicable relations between the partners – at least, between general partners. A falling out among partners, for whatever reason, can cripple or destroy an otherwise successful partnership. Before entering into a long-term partnership (as opposed to a joint venture), consider your relations with the other partners carefully and ask yourself whether you can see yourself working with them for years to come. If you’re not sure, think twice.Shared Decision-Making Processes. Successful partnerships also depend on a consensus-driven decision-making process, especially when only two or three partners are involved. If you’re not comfortable talking through decisions with your collaborators, a closely held partnership may not be the best fit.Corporation (C-Corp)A corporation, sometimes known as a C corporation or C-corp, is defined by the Small Business Administration as “an independent legal entity owned by shareholders.”“Creating a corporation is like creating a human being,” says Toor. “Corporations can be sued, sue others, hold property, [and exist within] a partnership.”According to the SBA, “the corporation itself, not the shareholders that own it, is held legally liable for the actions and debts the business incurs.” Compared with sole proprietorships and partnerships, whose members are held personally liable for business debts and activities, this is a major advantage for corporate shareholders.C-corps are subject to greater regulation than partnerships and sole proprietorships. In addition to onerous incorporation requirements, C-corps face ongoing regulatory burdens, such as the requirement that they hold annual shareholder and director meetings. If you’re running a small enterprise with limited overhead, incorporation could be more trouble than it’s worth. Here’s a look at the basic initial and ongoing steps you’ll need to take to set up a C-corp.Incorporation RequirementsCorporations must be formally incorporated with state business authorities, typically the Secretary of State office or equivalent. This requires drawing up and filing articles of incorporation, which include basic information about the entity:Company name and DBARegistered addressName and address of registered agent who handles official correspondenceThe company’s business activities or purposeNames of directors and offersInformation about the issuance of corporate stock, including share count and par valueLimitation of liability (indemnification) of officers and directorsDuration of incorporationDissolution proceduresAdoption of corporate bylaws (operating agreement), if extantYou can find low-cost articles of incorporation templates online. However, as with partnership agreement templates, cookie-cutter articles of incorporation aren’t ideal. It’s better to spend more on custom-drafted articles of incorporation that account for a wider range of eventualities specific to your company.Corporate Operating AgreementsIn addition to articles of incorporation, which are required by law, most corporations are governed by operating agreements or bylaws. These documents spell out in detail the way the corporation is to be governed. Like partnership agreements, they’re not mandated by law, but they’re highly encouraged.Corporate Tax ObligationsUnlike sole props and partnerships, C-corps are not pass-through entities. For tax purposes, they are treated as legally separate entities from their shareholders. They pay federal, state, and sometimes local income tax at corporate rates, which are different than personal income tax rates. They are also subject to different credits and deductions than individual filers. Check with the IRS for more information about corporate tax obligations, including forms required to file.Pros of a CorporationLimited Liability for Owners. As long as the corporate veil is preserved, meaning shareholder and business assets are kept strictly separate (not commingled), C-corp shareholders are not personally liable for the entity’s debts and obligations. They aren’t required to personally guarantee loans or purchases made on credit, and their personal assets can’t be seized to satisfy creditor claims.Easier to Generate Capital. Corporations can raise capital by selling shares of stock (equity). Partnerships that wish to raise funds without taking on debt must take on new partners or compel additional contributions from existing partners. Sole proprietors are even more constrained – they need to dip into their personal savings, borrow against tax-advantaged accounts, ask friends and family members for loans, or pursue other less-than-ideal options.Greater Legitimacy. For better or worse, incorporated entities appear more legitimate to lenders, vendors, and potential customers. This legitimacy can open lucrative doors: loans approved at more favorable terms, discounts or favorable credit arrangements on big-ticket equipment or inventory purchases, and greater credence from sales prospects. For ambitious companies hoping to raise funds from venture capitalists or private equity firms, the C-corp is the gold standard. I spoke with Bryan Clayton, CEO of Nashville-based GreenPal, about his initial choice to incorporate locally as an LLC. “[Incorporating as an LLC] was quick and easy and cheap. We figured it was the best way to get our company up and rolling,” he says. “What we didn’t realize is that an LLC is a no-go for institutional investors. Any outside investors such as private equity, angel investors, or venture capitalists will insist that your company be a…C-corp.” Clayton adds that the incorporation domicile is important too: “Delaware has an abundance of case law that is favorable to corporate structure, investors, and board members,” he says, “and is [therefore] generally accepted as the standard by the investor community.”Built-In Incentives for Employees. Equity is a powerful incentive for current and prospective employees. Corporations frequently reward performance, longevity, and other value-adds with stock or stock options, attracting high-quality employees and incentivizing them to stick around. In partnerships, the possibility of making partners is a comparable incentive, but it’s not practical to offer that carrot to hundreds or thousands of associates. Corporations can offer stock to any employee they like.Cons of a CorporationPotential Tax Disadvantages. C-corps’ shareholder distributions are effectively taxed twice: once at the corporate level, before distributions are made, and again as personal income on shareholders’ personal tax returns. Though corporate income tax rates tend to be lower than individual income tax rates, and most corporations use generous deductions and credits to reduce their tax burdens, that’s not always enough to offset the effects of double taxation.Expensive and Cumbersome to Form. C-corps are expensive and cumbersome to form. Proper incorporation requires substantial legal and financial assistance, especially in heavily regulated industries.Greater Regulatory Burden. Even privately held corporations are subject to greater regulatory burdens than partnerships and sole proprietorships. If insulation from personal liability and greater capital-generation potential don’t outweigh these considerations, look to a lower-key business structure.Lots of Potential Stakeholders. Larger corporations can have hundreds or thousands of individual voting shareholders, all of whom need to be kept informed about the company’s activities and given a voice in the company’s direction. This requires a tremendous investment of financial and human resources. Even in more closely held corporations with tens of voting shareholders, the potential for disagreement is greater than in general partnerships, which usually involve only a handful of egos. As countless clashes between publicly traded firms’ boards and activist investors attest, larger shareholders can cause a lot of trouble when they’re determined to throw their weight around.S Corporation (S-Corp)An S corporation, also known as an S-corp, is a special type of incorporated entity that’s ideal for small to midsize businesses. Like C-corp owners, S-corp owners and shareholders are insulated from personal liability for business debts, obligations, and actions. Unlike C-corps, S-corps are pass-through entities. Their income isn’t subject to corporate income tax – it passes through as distributions to shareholders, who then pay personal income tax at an appropriate rate (usually lower than rates on wage income).Incorporating and operating an S-corp is an intensive process. Like C-corps, S-corps require articles of incorporation filed with the appropriate authorities, as well as annual shareholder meetings. Operating agreements are also strongly encouraged.S-corps have a few noteworthy twists:S Corporation Election: After incorporating, all shareholders must sign and file IRS Form 2553. Known as a Subchapter S election, this establishes the corporation as a pass-through entity subject to certain restrictions. The Subchapter S election must be made within two months and 15 days of the beginning of the tax year to which it applies, or anytime before the beginning of the tax year.Shareholder Compensation: S-corp shareholders who also work as employees – for instance, owner-operators or executives with ownership stakes – must take “reasonable compensation” (salary taxed as wage income) in addition to their profit distributions.Shareholder Restrictions: By law, S-corps can have only 100 shareholders. The potential pool of shareholders is restrictive as well: S-corp shareholders must be U.S. citizens and (in most cases) human beings. With rare exceptions, S-corps can’t be owned by other businesses or legal structures, such as trusts.Stock Restrictions: Unlike C-corps, which can issue common and preferred shares, S-corps can only issue common stock. Common shares represent equity stakes and confer voting rights, widening the pool of shareholders with sway over the company’s decision-making processes.Uneven State Tax Treatment: According to the Small Business Administration, S-corps are treated uniformly under the federal tax code, but they’re subject to varying treatments at the state level. While most states recognize S-corps as pass-through entities, some (such as New York and New Jersey) tax S-corps’ profits and shareholders’ income from said profits. If you live in a state that treats S-corps differently than the federal government, you may need to file an additional state form.This blog post from Wyoming LLC Attorney has more on the differences between S-corps and C-corps – it’s required reading for entrepreneurs deciding between the two.Pros of an S CorporationLimited Liability for Owners. Like C-corps, S-corps limit shareholder liability. As an S-corp shareholder, you’re not required to personally guarantee loans made to the business or expose personal assets to creditor seizure.No Double Taxation. Like sole proprietorships, S-corps are pass-through entities. Unlike C-corps, S-corps are not subject to corporate income tax. By extension, S-corp shareholders are permitted to deduct their firms’ losses, if any, from their personal income. “Most businesses initially lose money,” says Toor. “S-Corps may help lessen the blow of operating at a loss [because] S-Corp shareholders can deduct corporate losses on their personal tax returns.”Easier to Raise Capital. As corporations, S-corps can raise capital by selling stock. Though they’re permitted to issue common stock only, they still have more flexibility to raise capital on favorable terms than sole proprietorships and partnerships.Greater Legitimacy. Like C-corps, S-corps are incorporated entities, with all the legitimacy that entails. However, S-corps aren’t ideal for institutional investors, so you may need to reincorporate down the line before seeking outside equity funding.Cons of an S CorporationSize of Ownership Class Is Limited. S-corps can’t have more than 100 individual (human) shareholders. If you need to raise lots of capital from a wide investor pool, C-corp status is a better fit.Potentially Expensive to Incorporate and Operate. Like C-corps, S-corps are expensive and cumbersome to incorporate. They have high ongoing operating costs and burdens, such as the annual shareholder meeting requirement. And S-corp shareholders have to worry about another wrinkle: the annual Subchapter S election. C-corp shareholders can disregard that one.Reasonable Compensation Requirements. Since wage income is taxed at a higher rate than the “reasonable compensation” requirement, this raises S-corp shareholder-employees overall tax burden.Greater Record-Keeping and Regulatory Burden. Like C-corps, S-corps have greater record-keeping and regulatory burdens than sole props and partnerships. If the costs of increased compliance outweigh the benefits, a simpler structure is probably right for you.Shareholders Must Be U.S. Citizens. S-corp shareholders must be U.S. citizens. If you’d like to start a business with noncitizens living in the U.S. on visas, you need to choose another structure.Limited Liability Company (LLC)Extant only since 1977, the limited liability company (LLC) model is the newest common business structure available to U.S. business owners. By some measures, it’s the most flexible.“LLCs are hybrids between corporations and a partnership,” says Toor. “LLC members have the same rights and limited liability of shareholders in a corporation, and LLCs themselves have the added benefit of being treated like a partnership for tax treatment.”Tax TreatmentAccording to the IRS, LLCs can be classified as corporations, partnerships, or sole proprietorships (disregarded entities) for tax purposes. The classification depends on the number of members (shareholders) and those members’ stated preferences (elections).By default, one-member (single-member) LLCs are treated as disregarded entities, with pass-through business income recorded on members’ personal tax returns (Schedule C or C-EZ). Single-member LLCs can file taxes using members’ Social Security numbers – no EINs required.LLCs with two or more members are treated as partnerships, regardless of the number of members. However, any LLC – including single-member LLCs – can elect to be treated as a corporation for tax purposes. And even disregarded entities are treated as separate corporate entities for certain tax purposes, such as employment and excise taxes.Filing and Regulatory RequirementsLike C-corps and S-corps, LLCs are required by law to file articles of incorporation with the appropriate state authorities. Operating agreements are strongly encouraged as well. According to the SBA, state law often leaves LLCs vulnerable to member losses – for instance, when a member dies or resigns from a multimember LLC, the LLC dissolves, and the remaining members must elect to form a new LLC if they wish to remain in business together. Capable business attorneys can draft detailed operating agreements that account for common (and not-so-common) eventualities like this.Going forward, LLCs’ regulatory burdens are lighter than S-corps’ or C-corps’. “The main difference between an LLC and S corporation is operational flexibility,” says Brian Thompson, a Chicago-based CPA, and business attorney. “LLCs are not subject to the requirement of an annual shareholders’ meeting or annual directors’ meeting.”By watching this video anyone can get the idea of forming an LLC for their small business.Pros of an LLCLimited Liability for Owners. Like S-corp and C-corp shareholders, LLC members are not personally liable for the enterprise’s debts and obligations.Lower Regulatory Requirements. Compared with S-corps and C-corps, LLCs have more manageable regulatory requirements. While articles of incorporation are required and operating agreements strongly encouraged, ongoing record-keeping and reporting requirements aren’t as onerous.Can Avoid Double Taxation. As pass-through entities, LLCs aren’t subject to corporate income tax.Can Request S-Corp Status for Tax Purposes. Like C-corps, LLCs can request S-corp status by filing a Subchapter S election within the first two months and 15 days of the tax year. Depending on the entity owners’ duties and employee status, this can lead to a more favorable tax situation for shareholders. For more information about how a Subchapter S election could affect your LLC’s tax status and your personal tax liability (state and federal), consult a local tax advisor.Shareholders Can Be Non-U.S. Citizens. Non-U.S. citizens can be shareholders in LLCs. This is an important advantage over S-corps, whose shareholder ranks are closed to noncitizens.Corporations and Other Entities Can Be Shareholders. Unlike S-corps, LLCs don’t restrict membership to human beings. Corporations, trusts, partnerships, and other legal entities can own shares in LLCs. This is a crucial consideration for more complex ventures, which frequently utilize LLC subsidiaries to manage financial and legal risk.Cons of an LLCMembers Are Considered Self-Employed. For tax purposes, LLC members are considered self-employed. Like sole proprietors, they’re on the hook for self-employment tax – the employer’s share of Medicare and Social Security tax.Potential for Greater Tax Liability. If your LLC income is taxed on a pass-through basis, you can avoid double taxation. However, if the enterprise is profitable, you may still find yourself subject to a higher marginal rate and greater overall tax burden.Final WordMost new U.S. enterprises choose one of these five common business structures. I’ve included a lot of information about each here, but if you’re serious about launching a business and need firm guidance on the right structure for your needs, I’d recommend speaking with a business attorney.And, one more thing. There’s a sixth type of business structure not mentioned here: the cooperative.According to the Small Business Administration, a cooperative “is a business or organization owned by and operated for the benefit of those using its services. Profits and earnings generated by the cooperative are distributed among the members, also known as user-owners.”Cooperatives are more commonplace than many consumers realize, especially in the food business. Hundreds of thousands of U.S. consumers regularly shop at grocery cooperatives – member-owned grocery stores that often specialize in organic or natural foods. Millions purchase food products from massive agricultural cooperatives, often without realizing it. Land O’Lakes, a popular consumer dairy brand, is a multibillion-dollar cooperative. Though less recognizable to the average grocery shopper, CHS is even larger, more diversified, and more influential.All that said, starting a cooperative is very difficult. I’ve been personally involved with two cooperatives and can attest firsthand to the sheer amount of manpower and force of will necessary to get one off the ground. In certain circumstances, a cooperative may be the best business structure for your needs, but it’s not a one- or two-person project.

PREFACEThe world is seeing the rise of a new world order with economic interdependence and cooperation amongst different nations at a level unmatched at any other instance in history. The changing dynamics have not left the Asian Continent untouched, with new, increasingly complex and multilateral relations being formed between the nations every day. The last two decades have seen the spectacular rise of China as an economic powerhouse and, in a post-Cold War world, the emergence of a new geopolitical climate.China’s engagement with all of the neighbouring countries with respect to power projections and foreign policy is well known. Be it in the form of hostilities for pending unresolved ‘issues’, state-sponsored and private economic investments, indirect proxy wars and trying to install governments which are under her direct/indirect control.Over the last decade, there has been a marked increase in these activities and trying to wrest control over specific nations which China has identified as strategically important. These countries overtly represent the trade routes, oil supply and sea lines of communication but covertly also enable viable replenishment and supply base for her Military especially for the PLAN (People’s Liberation Army Navy [1]). Through the direct and indirect investment of money, power, politics and military aid, China has created an astonishingly beautiful encirclement of India at various levels.This analysis is meant to understand this encirclement (chakravyuh) and how India can fight this out. The views and opinion in this analysis are based on open sources and connecting the dots to build and analyse. Qualitatively looking at the chief issues and possible solutions let us to firmly believe that all is not lost in this big geopolitical game. The whole encirclement can be broken and restricted to what can be either a mutual benefit to India or to a position which will not threaten India over coming decades.IntroductionChina has been making direct and indirect investments in Asia and African region from the early 2000s. However, in last 5 years, there has been marked an increase in its initiatives to make all these outward reaches into strategic geopolitical tools. The chief tool is shown in the picture belowFigure 1 – OBOR or One Belt, One Road initiative connecting Land (red) and Maritime Silk roads (blue) [2]OBOR has been represented as an economic tool [3]. It has been defined in many circles as the blueprint connecting over 60 countries accounting for 60% of the world’s population. Its collective GDP equivalent is approximated to be over one-third of the world’s wealth. The economic corridors OBOR proposes are as under1. New Eurasian Land Bridge2. China – Mongolia – Russia Corridor3. China – Central Asia – West Asia Corridor4. China – Indochina Peninsula Corridor5. China – Pakistan Corridor6. Bangladesh – China – India – Myanmar CorridorThese economic corridors effectively constitute the framework of the OBOR initiative beyond China’s bordersThe location and structure of the corridors are shown in the map below, which also outlines the route of 21st Century Maritime Silk Road.Figure 2 – The six economic corridors proposed under OBOROwing to Indian reservations and non-commitment, the whole initiative has not been fully successful. But the foundation of this whole initiative as a concept and realisation has progressed with multiple overt and covert investments in various domains.The extent of Chinese investments has been well documented and in various fields especially infrastructure. The Figure below depicts such forecasted investments in our area of interest over next 5 years. Strikingly Beijing has been pushing its soft power status as much as possible opening up new routes of communication, access to markets and also enabling power play into the domestic political setup in most of these places.Figure 3 Chinese Investments in 2017-21 [4]With the above figure, the adjoining commentary [4] statedIn 14th May 2017, this year, Mr Xi pledged an additional $124 billion towards his $900 billion “Belt and Road” initiative, a global trade and infrastructure drive that he is promoting as a long-term “win-win” campaign for the 65 nations that have signed up to it. Most western leaders stayed away from a two-day summit highlighting Chinese ambition to secure greater influence, but the 28 heads of state present at what Mr Xi called “a gathering of great minds” included President Putin of Russia and President Erdogan of Turkey.If the OBOR was just the threat owing to economic aid and strengthening China’s position by accessing more markets at reduced cost and secured lines, few analysts went ahead and declared another stratagem called String of Pearls [5]In an article in The Washington Times dated January 17, 2005 [6], it was disclosed that“China is building strategic relationships along the sea lanes from the Middle East to the South China Sea in ways that suggest defensive and offensive positioning to protect China’s energy interests, but also to serve broad security objectives,” said the report sponsored by the director, Net Assessment, who heads Mr. Rumsfeld’s office on future-oriented strategies.In spite of this disclosure, officially China never uses this terminology but its recent spate of actions indicate this stratagem being used from the South China Sea to Djibouti and in between CPEC project and Gwadar development, Hambantota development in Sri Lanka, Port construction in Myanmar, Container facility in Bangladesh and even overtures to open a path to Nepal. The map below gives an accurate idea of this aspectFigure 4 – China’s String of Pearls in the Indian Ocean. (Map Courtesy CIMSEC)The “string of pearls” concept is often viewed a military initiative, with the aim of providing China’s navy access to a series of ports stretching from the South China Sea to the Arabian Sea. This has caused some consternation, particularly in India, which sees itself as being encircled. [7]On July 12, 2017, when Chinese troops started moving into Djibouti for deployment into the 1st overseas base, this encirclement more or less became prominent. China’s Military and assets being deployed to secure their strategic investments causes a big headache for India from Political, Economic, Military and strategic perspectives. The game is set for a great rivalry between India and China with China already making the first move and entwining India into this chakravyuh.THE STRING OF PEARLSFirst, what is String of Pearls? The earliest definition that emerged is from July 2006 [7]Each “pearl” in the “String of Pearls” is a nexus of Chinese geopolitical influence or military presence. An upgraded airstrip on Woody Island, located in the Paracel archipelago 300 nautical miles east of Vietnam, is a “pearl.” A container shipping facility in Chittagong, Bangladesh, is a “pearl.” Construction of a deepwater port in Sittwe, Myanmar, is a “pearl,” as is the construction of a navy base in Gwadar, Pakistan.Port and airfield construction projects, diplomatic ties, and force modernization form the essence of China’s “String of Pearls.” The “pearls” extend from the coast of mainland China through the littorals of the South China Sea, the Strait of Malacca, across the Indian Ocean, and on to the littorals of the Arabian Sea and the Persian Gulf. China is building strategic relationships and developing a capability to establish a forward presence along the sea lines of communication (SLOCs) that connect China to the Middle EastFigure – 5 – Sea Lines of Communication (SLOC) for ChinaThe whole ruse of economic development for friendly nation followed by protecting such investments via Military deployment is the outcome of this strategy. The overt need of finding market accessibility, the resolute case of demonstrating growing financial might and increasing the geopolitical influences seems to be the key motivating factors for the peaceful nature of these pearl formations. The pretext got further strengthened by the Somali pirates causing harm to the SLOCs.Figure 6 – Somalian Piracy – Threat map – 2005-2010 [8]Connecting the figure 6 with figure 4 now reveals how the anti-piracy and protecting the SLOCs became paramount to the military aspect of the strategy. Unfortunately, the dual use aspect of the infrastructure build-up may enable China to use her men, planes, ships and submarines with vital capabilities to choke the whole of Indian SLOCs as well.The resulted base in Djibouti, Gwadar and many more places where a submarine can berth for supply replenishment is not just for anti-piracy measures but rather increasing the militarization aspect and controlling the rivals whom China considers as a threat for herself. These SLOCs common to both India and China also houses the largest route of Oil supply for the major part of the world. Busiest to the core, this corridor serves as nationally important aspect for multiple nations and this provide China with additional ammunition to either gain more geopolitical respect or to create choke points which can create issues and even cripple the adversaries. The usage of proxy elements as pirates to continuously harass a group of particular shipping lanes and countries dependent on it can become a big tool as well. Especially with the fact that China shares the highest number of border disputes and it has maintained an aggressive posture in claiming such disputed lands as their own and even going to the extent of putting military assets to protect the same.INDIAS GEOPOLITICAL ISSUES WITH STRING OF PEARLSRear Admiral K Raja Menon (Retd) has summed it up as the following areas of geopolitical concern for India wrt the string of pearls [9]Figure 7 – Areas of geopolitical concernIf we see this figure, it is easier to understand that both India and China basically square off and have no advantage over the whole area of concern. For India one side its the high mountains in the East, Planes in the West and Sea in the South. Each of the places with distinct advantages and disadvantages. For China, the whole of IOR is a long distance away from mainland requiring a formidable Blue Water Fleet to actually protect it. The Tibetan region dispute is well known for both India and China and thus it remains a status quo. The movement if it happens deep inside Myanmar literally will also stretch their supply line. The Myanmar government in spite of Chinese overtures also wishes to be in good books with India for the road and connecting infrastructure enabling it to have land transit routes too. Thus all types of chess games as of now basically point to a draw status.The change in the strategic strength happens via fundamental instability of Pakistan and China’s huge investment in CPEC or China Pakistan Economic Corridor. [10] Over the last few years slowly the Chinese investments and buying of Stakes in Pakistani State Enterprise mean there is a dramatic increase in controlling form over Pakistan. With the further extent of military cooperation, assets being supplied with long-term loans and establishment of proxies to control state machinery, China’s control and changeover of Pakistan into its own province or vassal state is almost complete. The issue of proxy elements is already well known with the usage of terror proxies and aiding them with arms and financial aid in North East India. With the radicalised religion based proxies in Chinese hands, there seems a greater stability-instability paradox. On the side it keeps India engaged with constant de-stabilisation aspects and on the other side, the same radicalised elements can also cause a religion based extremism elemental increase in Chinese provinces closer to Pakistan. The extent of the fallout from such a situation is a worrisome factor and coupled with mainstreaming the terror elements into the political front to gain legitimacy and recognition points to a grave concern. On one side the Chinese investments and underlying security make its investments very much secured yet they further went ahead and ensured the income generated via this whole project, trade increase and even transport plus transit benefit China far greater than Pakistan. This implies over time, there will be a deep grudge built up which can be exploited by radicals and can unite all under the name of one religion to fight against this oppressive stance of China. This will throw the whole Western Border of India and the adjoining geopolitical concern into chaos and possibly lead to Syria 2.0 scenario all over again.The other area of concern is the Middle East. The house of almost all problems exists as of today in spite of Oil being the largest resource allowing them to manipulate the whole world economy as per their whims. Yet there is Saudi Arabia Qatar issue, Iran hotbed, Syria- ISIS, Turkey NATO to and fro stances, Israel-Palestine, Hizbollah-Hamas, Nuclear Weapon and continuous quest for an Islamic Bomb under their control – the list is pretty long. The illegal trading and proliferation of Oil and changing the small guidelines to hurt Import dependent economy like India is a big risk. The challenge for India is that each side will insist on a mutually beneficial relationship with India but also insist on differentiating between their own friendly and enemy nations wrt to India’s relationship. As India is dependent on ME for Oil, our stance and our strategies have to be very careful of this aspect.Other potential areas of concern include the identifying more such Pearls inBangladesh: A container port facility at Chittagong is coupled with extensive Naval and Commercial Access. Bangladesh reliance on Chinese military assets like submarines via soft loans is a step in that direction. In total for over 34 projects, a sum of USD 25 Billion has been committed by China. [11] The challenge for a growing economy like Bangladesh is soft loans help in creating less stress over any commercial loans which may have stringent terms and a higher rate of interest. Smartly, China has been trying to convert such loans into commercial loans and trying to make Bangladesh default like in the case of Sri Lanka, it wishes to use the secured assets as a way of consolidating its hold once the default occurs. Dhaka has been resisting this attempt knowing well the fate of Hambantota port and China taking it fully for failing to repay the debt and thereby buying it to square that loan off from its books.Nepal: The India-Nepal relationship has seen several ups and downs but last few years have seen possibly multiple bottoms. With the sharing of culture and majority religion same like India, the differences emanating between Kathmandu and New Delhi are very surprising. Chiefly these issues have been taken advantage by lack of communication and strategic compromises to find a middle path to solve the challenging issues. China had made several in-roads into Nepal by taking advantage of these discomforts and had fuelled up the anti-India stance even more. The last few issues of rights of Madhesi people, access to fuel & Oil and basic transport routes, the communication and internet access for local Nepalese people had only created a bigger divide which China took full advantage by providing quick telecommunication and broadband coverage, maintaining neutral stance for ethnic group’s rights and even trying to open a new path for transport via Friendship Highway. This coupled with quick rehabilitation and aid when the earthquake struck Nepal helped China consolidate its position in the minds and heart of Nepalese people.Figure 8 – Map of the Friendship Highway – Kathmandu to Lhasa [12]With China in Nov 2017 taking the cross-border railway plan very seriously [13], this implies Nepal will rely greater on China and any adverse relationship impact is easily offset by Nepal Chinese communication and accessibility. Nepal thus gains a route via OBOR easily and looks at OBOR for its own survival and directly plays into the hands of the waiting China who will use Nepal then easily to open another front wrt India. In Nepal investment summit 2017 held in Kathmandu, India committed USD 317 million while China proposed to invest USD 8.3 billion. Such is the stark difference in the financial aid that Indian strategy in Nepal needs urgent attention and smart play to maintain some control and protect India’s interest.Bhutan: India and Bhutan share a special relationship over decades. Here also China has attempted to try its level best to meddle in some manner. With the redrafted 2007 India-Bhutan friendship treaty, Bhutan has slowly got the right to follow an independent foreign policy. China has tried to showcase its economic muscle here also with an open carrot of a huge economic package in case Bhutan agrees to settle all disputes bilaterally with China and not involve India with whom Bhutan is committed via Friendship treaty. The recent Doklam crisis was a tussle due to these overtures only with China-Bhutan border disputes in 3 different pockets out of which Doklam is strategically most important from India’s perspective. China has offered to relinquish its claim over two pockets in northern Bhutan in exchange for the Doklam pocket in the western Bhutan, where Indian and Chinese armies were engaged in eyeball encounter. India is the security provider for Bhutan had to step in to safeguard both Bhutan’s sovereignty and India’s security. The flared up issue had been solved by the peaceful climb down from both China and India but this dispute, in reality, is far from being solved. This will be a potential point of crisis over time and will need adequate attention from India’s perspective.Myanmar: India-Myanmar relationship has been healthy for a long time but the government has always been closer to China than India. In spite of turning democratic, the elections have not been fair and elected candidates always are by the support of China overtly or covertly. Primarily a commodity resource-rich country, China has invested huge sums in Myanmar in infrastructure and mining in last 3 decades. One of the controversial projects is the port development of Kyauk Pyu port in Bay of Bengal with an estimated Chinese investment of USD 7.3 billion. With China having, by all means, a controlling stake of over 75%, this is a very big threat to India. With Chinese arms and military assets, Myanmar is dependent completely on China for its survival. This port will see subsequently berthing of Chinese nuclear submarines and with electronic intelligence gathering facilities on islands in the Bay of Bengal and near the Strait of Malacca, this makes it a grave risk for India.Sri Lanka: The island nation had been in a stable relationship with India until the IPKF movement and subsequent Tamil Eelam issues which ate up almost decades of time and gave an opportunity for outside nations to use Sri Lanka as a political tool to counter India. Sri Lanka owes almost USD 8 bn to China and that is estimated to be approximately 12%+ of its overall debt. These loans are commercial in nature and hence attract a significant rate of interest. These loan based projects and the port opened for commercial purpose 7 years ago had generated limited revenues and hence Sri Lanka has struggled to repay its due. In 2016, Sri made a deal to sell an 80 percent stake in the port to the state-controlled China Merchants Port Holdings. With vociferous protests from all sides, in July 2017, the deal was amended to give Chinese company 70 percent stake in a joint venture with Sri Lanka Ports Authority owned by Sri Lankan government.Figure 9 – Hambantota location on a mapThis December Sri Lanka has formally handed over its southern port of Hambantota to China on a 99-year lease, which government critics have denounced as an erosion of the country’s sovereignty. [14] The Sri Lankan government has given assurances that the port will not be used for military ends. Despite Sri Lankan assurances, Indian observers express concerns that Beijing could operationalize Hambantota as a resupply node for the People’s Liberation Army-Navy in the future. [15]Maldives: India-Maldives shared a healthy relationship for a good amount of time till there was a change in regime which is very much pro-China. China via way of economic subsidies for tourism market has controlled the local government’s major source of revenue. With the cancellation of GMR building the infrastructure project and giving it out finally to a Chinese company, the shift was more or less made public. Last year, China acquired an uninhabited island near Maldives capital Male on a 50-year-lease at the cost of USD 4 million. Some reports claimed that Chinese will build a military infrastructure there and an air force base will be built up. Airstrips under construction are now seen in satellite images.Figure 10a – Road bridge, 2nd runway and reclamationFigure 10b – New runway under works and reclamation [16]In addition to all this Beijing has made important inroads in the Maldives, which concluded a free trade agreement with Beijing at the end of November, last month.With a military base in Djibouti, troops stationed in CPEC, Maldives airstrip opens up another area of concern for India.Some smaller notable mentionsCambodia: China signed a military agreement in November 2003 to provide training and equipment. China has funded close to USD 2Bn since then with loans for Cambodia and about 70 % of roads and bridges are built with these funds only. [17]South China Sea: China has built up considerable infrastructure in man-made islands. In 2017, China built underground storage areas, administrative structures and “large radar and sensor arrays, according to the Washington-based research group named Asia Maritime Transparency Institute of the Center for Strategic and International Studies. The construction covered about 290,000 square meters “of new real estate.” Beijing built most actively at Fiery Cross Reef in the Spratlys including work to finish tunnels that are likely for ammunition storage. High-frequency radar gear also appeared on the reef, China has enough installations to land fighter jets, refuel, rearm and let crews rest, according to Collin Koh, maritime security research fellow at Nanyang Technological University in Singapore. [18]Thailand: Thailand is deeply dependent on Chinese capital for its economic growth. recently it has also purchased 3 Chinese submarines for almost USD 1.2 Bn as well deepening its military times. High-speed railways, power projects, Eastern Economic Corridor and OBOR are the main themes of the present-day government of Thailand and China. [19]As seen the geopolitical concerns are at multiple levels with many entities. In the next chapters, we further analyse and present what could be inferred and we can explore the possible solutions to this issue.A MARITIME PERSPECTIVE OF THIS CHAKRAVYUHFrom a baseline perspective, we have seen the following based on previous chaptersEnhanced Economic outreachesFocus on geopolitical tradeSecuring Energy routes at any cost for all situationsFocussed on maritime aspect and SLOCsOvert usage of economic-political willpowerCovert usage of economic-political-military aspects of decision makingIt is clear that the economic prosperity scope is dependent on maritime nature of the whole mix of sea lanes of communication, strategic shipping/merchant lanes, secured trade routes to access newer markets at reduced logistical costs and protecting all via a dominant military back up to support its security.It is pertinent to note that all this is primarily showcasing an increased need and thrust in maritime power projection and usage of naval assets to ensure safety, security, the order of sea lanes and force towards the dominance of power projection. A simple breakdown from different perspectives makes it easier to understand the interdependencyPolitical and Diplomacy PerspectivesBuilding deeper relationship with nations in Asia and AfricaRecognising different nations for direct and indirect cohesionGreater recognition in global arenaRecognition as a powerful nation in a multipolar worldChallenge the old leadership and dominance of World powersEconomic PerspectivesInfrastructure Buildup in the trade route in supporting nationsInvestment in overt and covert form to have firm controlIdentifying strategically good locations where income generation is limited but the project is made to show a huge cash flow generation in future for annexing.Initiate the relationship with soft loans and changing the debt to commercial rate of interestsCommanding a greater sum of profit.Management control over the whole invested and linking complexFocussing on Energy Security aspectFocus on providing engineering and technology solutions for basic modes of transport infrastructure as a whole.Using technology to infiltrate into the lives of common citizens and creating a dependencyThe whole economy of the supporting nation indirectly depends on mainland China’s economic policies and overtures.Controlling commodity at resource excavation/mining to transport to storage aspects.Military PerspectivesCreation of military outposts across the IORUpgrading the intelligence gathering perspectives with reliance on Electronic, communication, satellite imagery-based intelligence and use of Space-based assetsCreation of berthing places for surface ships and pens for docking submarines without raising any suspicionStocking of supply, replenishments and weapon based assetsMilitary personnel training and rotation on different platforms for operational deploymentNeutralise any threat to China and its investment placesLinking up Military sales to local Chinese Military Industrial Complex via ways of soft loans, training and even support services creationEstablishment of local repair depotsCreation of Satellite Tracking and Imaging centreEstablishment of VLF Submarine communication setupsAccess to Beidou GPS SystemsEstablishing dual use communication medium, ground-based and space-based assets.Cultural PerspectivesPromoting Chinese culture and Chinese way of lifePushing significant expatriates into supporting nations in order to create a local population over time which is more China favouring and leaning in ideologies.Soft power creation and projectionEnhancing Tourism connectionsIncreasing the citizen to citizen contact and exchange programEnhancing education exchange program and scholarships to boost image among new generationsTaking over or buying controlling stakes or covertly manipulating local media and newspapers to follow mainland China news media viewpoints, in turn, making mainland China media a globally acceptable name.Using ancient Chinese medicines and treatments for humanitarian assistanceOpening up Confucius institute in different nations. These institutes are affiliated with Ministry of EducationUse sports, movies, art, music, films to push Chinese perspectives.The above perspectives provide a deep insight to understand the nuances of China’s actionable. If we consider now string of pearls and China’s possible encirclement of India, the whole picture looks like this belowFigure 11 – The possible ships and submarine berthing places in China’s string of PearlsIt is important to understand that China in its quest for the string of Pearls had basically ensured that South China Sea stance of hers is shown as a template of power projection and determination.In doing so, it has rubbed Vietnam hard and forced Vietnam to spend a considerable amount in Military wares and assets to safeguard its security.Philippines which has been a pro-USA country and USA protection owing to a weak Navy succumbed to a plethora of economic deals signed over last 12 months. China won her by the means of economic deals softening her strict resistance to the SCS dispute and diluting the whole root cause further to her own benefit.Malaysia is another commodity-based economy which has been struggling for some time. In Spite of assets which it has, most are aged and needs replacements. To safeguard its own strategic needs, Malaysia will be forced to spend money to buy out new military wares.Taiwan is facing an impending situation of almost many missiles targeting Taiwan and simulations related to its annexation. It plans to increase investments in military wares and assets as well to safeguard its interests. Being a close ally of USA, the China vs USA confrontation is a starked realitySo all the parties in the SCS dispute had been dealt with in some ways and resultant action only showcases that taking on China alone may not be the best course of action overtly or covertly. If we look at figure 11, simple facts come to light based on previous chapters. To make things, even more, clearly let us look at another pictorial [20].Figure 12 Comparison of ports in IORGiven above is the list of all ports which are shown on the map and also the disputes which India has with Chi-Pak axisIf we draw a parallel between the east side of the string of pearls resolution or SCS resolution within the future west side or IOR region outcome, few points become very clear.China is creating a dual-use civilian infrastructure of commercial nature which can be used for the military purpose as well.Wrt to an aggressive stance in SCS, the same aggression should be applicable when the right amount of manpower and assets under deployment and rotation are available.The neighbouring countries especially India should be very cautious. As the time goes by, Threat index will see a marked upswing and there will be potential eye to eye confrontation in multiple exchange pointsThe strategy in IOR is clearly followingBuild-upConsolidate access pointsCreate a direct competition with IndiaUse A2/AD or Anti Access /Area Denial in order to isolate India and ensure no external help can reach IndiaPropping up Pakistan based proxies covertly and overtly using its forces to keep India engaged all the timeAnother distracting scenario will be created to ensure the friendly country to many of these nations and IORs greatest security provider – the USA is kept occupied and its supply line always stretched.With USA engaged stance, its geographical concentration is weakened allowing scattering of assets favourable to China limited naval presence.Over time with such bases and full staff/support/ assets, China will be in a position to launch multiple front attacks simultaneously thereby defeating potential adversaries like India within the conventional realm easily.In the end, the military perspective is to create an uncertainty and uneasiness aspect to keep India thinking forever. With propping up multiple issues in these Strings, India remains engaged and China will keep on weaving a net to tighten our geopolitical manoeuvres further.REMEDIAL MEASURES TO BREAK THIS CHAKRAVYUHThe remedial measures to break the chakravyuh is basically two prong.Economic and diplomatic InitiativesSecurity InitiativesEconomic and Diplomatic initiativesThere have been 3 major points under this initiative [21]India has long been the dominant power in South AsiaAs Beijing invests millions in the region, New Delhi is looking to defend its sphere of influenceIndia must play to its strengths instead of attempting to match Chinese capitalIt is important to understand that China has an economic might, a banking industry to back its strategically important projects and financial capital for high-risk projects. To offset this, following solutions may be exploredIndian agrarian economy and food security can aspects can be replicated to ensure adequate self-sufficiency can be created or a group can be created to look after that for all members. Monsoon plays a pivotal role as well and hence an integrated weather forecast and management will greatly aid all supporting nations.From manufacturing aspects, India should look at creating a major global manufacturing hub in India and allow a part of the supply chain of less complex work involving the low end of technology matrix but highly manpower intensive to be in the supporting nation. In a way instead of a single industrial complex, India should try to create a hub in the homeland and spoke based industrial reach in multiple support nations. With the dependency of trade and manpower being employed, this creates a much better scope of cooperation without straining Indian monetary aspect too much.This can be further enhanced by a collective nation signing a free trade agreement among themselves which will help boost economic cooperation further.To boost connecting the east to west corridors, there should be an accelerated creation of a tax-free zone in A&N islands. The aim is to create a gateway region replicating Mauritius – gateway to Africa, Singapore – gateway to Southeast Asia, Dubai – gateway to ME perspective. A&N can become the gateway to India and its associated nation group thereby making it a very attractive economic proposition. A Free Trade Zone and Free Economic Zone with full exemptions/concessions to the investor would attract a large amount of foreign capital flow, boost exports and in turn boost precious foreign exchange improving our overall financial health further. This coupled with skilled job creation will help us use our young population adequately.Opening up interbank cooperation with the extent of allowing Domestic Systemically Important Banks (D-SIB) to open up branches with full services in support nations. Now the idea is to allow support nation credit requirements to be availed via these D-SIBs. Since the industry may be a spoke to Indian hub, access to credit should not be a big issue with recourse via payments routed through these D-SIBs. On top, such industries in foreign support nations should be given either a priority status or an interest subvention scheme in order to facilitate further growth in aiding many industries. Indian Rupee acceptance and Indian Rupee structured loans will make this proposition even more attractive. Indian Rupee may be identified as a common currency yet keep domestic currencies as well. This will free the forex fluctuation effects and help the economies of all further.India should champion the cause of renewable energy and should use Solar Energy and low-cost solar cells as an effective tool to help supporting nations ease through the energy crisis. India’s brainchild International Solar Alliance should be used to good effect to push this noble cause. Striving for a greener planet will help create a better image of responsible India and allowing support nation to accessing affordable Solar tech will enhance India’s economic and technological mightIn terms of the population, India and the supporting group in IOR will house a huge number of population of different age groups. The standard of living will be a big challenge and basic amenities, nutrition and sanitation should be the key challenge. Right to education and responsibility to provide a quality life and alleviate poverty will be welcome steps in that direction.India should also look at allowing companies in the telecom industry to aid in providing low-cost communication access and broadband. In this Reliance-Jio with its Voice over LTE technology will be in the forefront by establishing network infrastructure and providing like India ultra cheap call rates and data packs.India should also harvest its Medical tourism industry by tying up medical aid and ease in visa procedures. The supporting nations may be given Visa on Arrival and also expedited clearance for medical reasons to support this further up.Subsidised Airfares to and fro can also be envisioned for patient and dependent. The D-SIBs can be further supported by Medical insurers which can cover all such potential people and help them settle the medical bills via such Insurances. An AIIMS institute and education college can also be opened up in each supporting nation with full capex and opex cost to be borne by India. The training imparted can help build a generation of future medical professionals in this field.Collaboration and the opening of quality institutes like IIT, IIM and IISc in supporting nations in order to impart quality education. Such campuses will help in strengthening the education system overall of the whole region overall and will provide similar skill sets to youth for working in industries. This will further cause the soft power increase for IndiaUsage of Culture, sports, movies, film and music to create a bonhomie and united aspect of all countries together. These are important mediums to share and impart information to all.Creation of a one media entity for print, audio and video media for all type of news dissemination. Like vernacular editions, such a media house will help reach every corner of the supporting nation and let news reach and shared among all.A common APP tool for all aspects of payments to all important notifications. Aadhar and biometric database creation can be done for all support countries to allow easier access and transaction of various services. This coupled with APP can help in creating a digital economy in a big waySecurity InitiativesIndia must spend on a rapid modernisation plan with the focus on two and half front war aspect. This will mean India need a considerable investment. The extra half front is being kept for emergency purposes when supporting nations may be needing our help or one of the nations can be entangled in Chi-Pak mix and open a new front against India as well. The modernisation must be tangible in the timeframe, use a mix of indigenous public and private sector and also suitably make maximum assets under a make in India campaign. Since the war theatres are multi-dimensional, the formation of a joint command with the appointment of Chief of Defence services and smooth transition into a network-centric battlefield is essential. India should also formally recognise and appoint important resources in Cyberwarfare and invest heavily to protect its military installations and the dual-use ones as well.India must showcase its power by covertly planning and disposing of the present Maldives government. maldives is an important piece of this jigsaw puzzle and we must act now in order to salvage what is an extremely precarious situation. We can take the aid of multiple world power like the backing of USA and usage of the agency like CIA for this joint ops as well.India should try and get closer to ME countries like Kingdom of Saudi Arabia, UAE, Qatar etc. In these places, we should try to have a strong relationship to the extent of covertly and overtly supporting a more favourable regime to India.This is important from the perspective of Energy like OIL and sovereign fund investments to aid our development. In return, we can look at installing satellite tracking and receiver station, a specific ME satellite and letting them access GAGAN GPS systemBuild a full-fledged Naval (with air wing) and Army base (Converting Southern Command into an Amphibious command) in Seychelles for neutralising Djibouti completely. Important to have a space-based asset constellation overlooking it 24×7. Need also to deploy unmanned maritime patrol aircrafts. In future, if we have a considerable number of aircraft carriers (as a result of point 1), we should look at permanently placing a CBG base in Seychelles.Signing a contract with France, to allow Indian ships to deploy in Reunion Island. This will create a further a further base zone till Seychelles based comes online. By putting considerable security apparatus there and letting France in turn access to Seychelles base, we create a better power projection and security enhancer for the region.Raising a Brahmos AShM regiment and placing in A&N in order to secure the whole region completely. The militarization of A&N command should be further augmented with specific amphibious assets along with naval and Airpower placement. Assets like LHDs, NMRH helicopters, ASW ships, ISR assets need permanent housing and deployment to ensure the entry to IOR is properly kept in check all the time 24×7.Owing to a small but significant stake in Hambantota port (where Sri Lanka government ahs 30%) and ensuring all decision making is transparent. By appointing our own person there for the stake and our eyes on the ground, we can ensure there is no chance of any security lapse and full compliance of that project is for civilian purposes only.Upgrading Indian Oman relationship from naval berthing rights and anti-piracy operations to full scope of military deployment. With the need of border fencing from Yemen side and listening post already there, this relationship upgrade will help us deploy troops more easily. Such a position will help us checkmate Gwadar and CPEC permanently.Concretising India Singapore relationship into a military pact. As of now its a logistic sharing pact signed last month under India-Singapore Bilateral Agreement for Navy Cooperation. We have also the Air Force Bilateral Agreement in place from 2007 and renewed on the sidelines of the 11th Singapore-India Defense Policy Dialogue in January this year, while the Army Bilateral Agreement was also already in place in 2008 and is expected to be renewed next year. Indian Navy’s greater access to Changi Naval base and possible deployment of assets would greatly enhance our security perspective. The placement of the Singapore and proximity to SCS implies the Chinese assets has to pass this point which enables us also to counteract and protect our interests.Over time we should explore on Lostical sharing agreement followed by a military pact and a base access in Vietnam, Philippines, South Korea and Japan. Each of these points represents a further strengthening and encirclement of India’s interest in protecting its shipping and trade lines.ConclusionWith this, it should be also noted that many of the solutions are not immediate in nature and may require at least 2-3 decades to fructify. what must be noted that this Chakravyuh can be broken with a mix of actionable on India’s part. What is paramountly needed is the resolute political decision-making ability at highest levels to change the status quo and often found slow reactive stance which has plagued us for multiple decades.The whole analysis had shown how China has employed the economic might coupled with dual-use infra creation for military aspects and how it has gone ahead to create the string of pearls. It was explained from an Indian maritime perspective as well followed by possible recommended solutions. The recommended solutions instead of sticking to either economic-diplomatic actionable or only security initiatives, rather a 360-degree view was attempted to showcase how both are also interdependent.As seen over the course of this paper, the analysis had thrown light to important geopolitical developments and had raised two important aspects. First is the identification of the Chakravyuh, which will need much more than mere words and saying that India will protect its geopolitical interests. The identification must be backed by solutions which are reviewed, amended based on the feedback of time, resource and situation to maintain relevance.India can surely break this chakravyuh and take China over its own game. At far less investment of time, money and resources. The relevant question next is when will India begin? To this small baby steps have been taken. It’s now time to act and take giant strides to protect all our geopolitical, economic, diplomatic and military interests.REFERENCES[1] –People’s Liberation Army Navy – Wikipedia, People’s Liberation Army Navy – Wikipedia[2] Where Africa fits into China’s massive Belt and Road Initiative, Where Africa fits into China's massive Belt and Road Initiative[3] China Britain Business Council, http://www.cbbc.org/cbbc/media/cbbc_media/One-Belt-One-Road-main-body.pdf[4] Prosperity will come down $900bn silk road, says Xi , Prosperity will come down $900bn silk road, says Xi[5] String of Pearls, String of Pearls (Indian Ocean) – Wikipedia[6] China builds up strategic sea lanes, China builds up strategic sea lanes[7] String of Pearls: Meeting the challenge of china’s rising power across the Asian littoral, Christopher J. Pehrson, http://ssi.armywarcollege.edu/pdffiles/pub721.pdf[8] Map showing the extent of Somali pirate attacks on shipping vessels between 2005 and 2010, File:Somalian Piracy Threat Map 2010.png – Wikimedia Commons[9] Components of National Security and Synergising Them for Envisaged Security Threats in 2025, National Security Paper 2011, USI of India | An article by USI[10] China–Pakistan Economic Corridor, China–Pakistan Economic Corridor – Wikipedia[11] Beyond Doklam: How China is winning over India’s neighbours with money, arms, Beyond Doklam: How China is winning over Indias neighbours with money, arms[12] 8 DAYS TIBET TOUR – KATHMANDU TO LHASA OVERLAND, http://www.joaoleitao.com/motivation/8-days-kathmandu-lhasa/[13] China has begun feasibility study on cross-border rail line with Nepal: Envoy , https://timesofindia.indiatimes.com/world/china/china-has-begun-feasibility-study-on-cross-border-rail-line-with-nepal-envoy/articleshow/61701761.cms[14] China signs 99-year lease on Sri Lanka’s Hambantota port, https://www.ft.com/content/e150ef0c-de37-11e7-a8a4-0a1e63a52f9c[15] Sri Lanka Formally Hands Over Hambantota Port to Chinese Firms on 99-Year Lease, https://thediplomat.com/2017/12/sri-lanka-formally-hands-over-hambantota-port-to-chinese-firms-on-99-year-lease/[16] REVEALED: The ‘Secret’ Chinese Airstrip Emerging In Maldives, https://www.livefistdefence.com/2017/04/14578.html[17] China Funded 70% of Cambodian Roads, Bridges: Minister, https://www.cambodiadaily.com/news/china-funded-70-of-cambodian-roads-bridges-minister-132826/[18]Study: China to Boost Military Muscle at Sea to Deter Foreign Powers, https://www.voanews.com/a/study-china-boost-military-muscle-sea-deter-foreign-pwoers/4171738.html[19] THAILAND CHASES CHINESE MONEY, BUT AT WHAT COST?http://www.scmp.com/week-asia/society/article/2102934/thailand-chases-chinese-money-what-cost[20] Edgar Fabiano, https://commons.wikimedia.org/wiki/File:Collardeperlaschino.png[21] China is pumping money into countries around India — but there are ways New Delhi can hit back, https://www.cnbc.com/2017/10/05/china-is-pumping-money-into-countries-around-india–but-there-are-ways-new-delhi-can-hit-back.html[22] Why the New India-Singapore Naval Pact Matters, https://thediplomat.com/2017/11/why-the-new-india-singapore-naval-pact-matters/

How to Cancel Your Timeshare ContractPart OneChapter 1: Overpriced Cheesecake Anyone?Chapter 2: From Victim to Vindication.Chapter 3: How Exchange Companies Mislead Timeshare Chapter 4: Two Scams Timeshare Owners Must Watch Out for.Chapter 5: Kiss That Timeshare Goodbye!Part Two – Action PlanChapter 6: Plan of Attack (Secrets Revealed).Phase 1: Opening Letters.Phase 2: Follow Up Letters.Phase 3: Final Letters.Conclusion®//TIMESHAREHACK. V.303AOverpriced Cheesecake Anyone?It has been a legend through the decades that timeshare was originally created far, far away in the French Alps. Paul Doumier of the Société des Grands Travaux de Marseille was struggling to sell year-round accommodations at the SuperDevoluy Alpine ski resort. He was finding that people were a little too clever to pay the money he was asking for, since they'd only be using the accommodations for a tiny part of the year. The people he was trying to sell too used words like “too expensive”, “get lost”, “go jump in a lake.” Well it really wasn’t feasible to jump in the lake at the ski resort due to frozen conditions, and it wasn’t appealing to lower his prices because that would obviously cut into his extraordinarily lucrative profits. However, what Paul Doumier had noticed was that at the ski resorts famous gourmet coffee shop they could sell “slices” of expensive cheesecake at several times the price of the real cost of the cake if the cheesecake had been purchased whole. This is where the idea for timeshare was born. And using the same concept timeshare companies began making extreme profits selling “slices” of property.Now let’s do some quick math of a timeshare resort:Typical Timeshare Resort - Individual Condo Units Per Resort: 500 unitsWeeks for Sale Per Unit: 52 weeks 500 x 52 = 26,000 Weeks for SaleAverage sales price per week: $ 12,90026,000 weeks’ x $ 12,900 = $ 335,400,000 total developer receipts.Yes, you read that right - $335.4 million! That’s before the resort collects a dime in finance interest rates, late fees, and maintenance fees. So what does this mean to you? Well, take a moment and ask yourself – does that resort you just bought into look like a 335-million-dollar resort? How about even a 100-million-dollar resort? Chances are, not even close.Now think about all the interest rate charges the resort makes (the average rate is an additional 12% on top of all the above costs). And don’t forget to take that 26,000 weeks and multiply it by the average maintenance fee and then you have another 20 million in annual revenue to just maintain the resort. Does your resort look like they spend 20 Million dollars a year to keep your unit nice and clean? Not even close. Some say the two most lucrative businesses in America are running a credit card company and owning a timeshare resort. From millions to billions… and all from people just like me and you. In short, this is why timeshares are EXTREMELY overpriced, and timeshare companies make EXTREME profits.Fast forward to the present - the amount of money a timeshare sales representative can make in a day coupled with the amount of money a manager and director can make almost certainly leads to a corrupted sales environment where all integrity vanishes. The truth is evidently greatly exaggerated and brazen lies are encouraged because greed has taken over. More often than not, the sales representative you shook hands with the day you purchased your timeshare was encouraged to exaggerate and possibly outright lie while looking directly into your eyes. All this was allowed so the resort developers could pursue unbelievable riches.From Victim to VindicationThe worst part about being a victim of crime is many times the victims blame themselves. Most people try to rationalize being a victim of a crime. This is our human defense mechanism helping downplay the feelings of betrayal and hurt. It happens to everyone who has ever been a victim of a crime. Many times they think, “I shouldn’t have left the car door unlocked overnight,” “I was so stupid to let them into my house,” “I should have bought that alarm system,” and even the “it’s my fault he got mad, he’s normally not like that.”Why do victims blame themselves? That’s for another book entirely. But this feeling is also what a very large percentage of timeshare owners feel. Many experience immediate buyer’s remorse. They say things like “I’m not sure what I was thinking that day,” “they really caught us at a weak moment,” “we normally say no to things like that,” “they really talked a good game that day,” “I am not sure what we were thinking,” “we promised each other we weren’t going to buy something that day – I am not sure what happened.” And on and on and on.Many purchasers just chalk it up to just a bad mistake, not knowing that these seemingly friendly sales representatives have had extensive coercion training as well as subconscious and emotional trigger training. Every last word the sales rep used was on purpose, and every piece of data they gained from you was used against you. You may have trained years for your job and have become very proficient at what you do. So did they, except their profession teaches them how to disarm you – create feelings of desperation, jealousy, fear and inspiration without you ever knowing they programmed those feelings in your head. We have seen the training manuals of these sales representatives and every single move is calculated.Remember, you probably woke up the morning you bought your timeshare and specifically said to your spouse, “we are not buying anything today!” However, later that day you walked out with a timeshare. It is not that you purposefully changed your mind. It was the fact that you encountered a team of professional salesmen who have been trained in that art of thought rendering and thought patterning to “encourage” you to buy their product. Legal? Yes. Ethical? You decide.The worst part about everything discussed in this chapter is that not only do they use unfair ways to “encourage” you to purchase their timeshare – many times they commit outright fraud. Here are some common FRAUDULENT timeshare promises or actions that legal experts say you may have been a victim of.(You will be using this list of allegations in the WORD templates)Possible “fraud in the inducement” bullet points:1)This offer is good for today only.2)That timeshare is in hot demand3)That timeshare is a great investment4)That timeshare – like real estate will appreciate in value over time.5)The timeshare presentation is only going to be 90 minutes.6)The timeshare is in such demand it could always be RENTED for a profit.7)You are buying pre-construction and this timeshare can be SOLD for a profit after the next “phase.”8)This week/ resort is such a valuable week to all of the exchange companies that you can trade for "anytime, anywhere."9)This maintenance fee will not increase over time – or…10)You will be attending an "update" to discuss questions (also called a policy change, owners update, etc.… - Later it was actually a sales presentation).11)This is not timeshare but Vacation Ownership or Vacation Property.12)(You) were subjected to high pressure sales tactics or felt that you could not leave the presentation without purchasing timeshare?13)The timeshare sales agents plied us with champagne (or other alcohol)14)The timeshare sales agents assured us we could cancel if we had second thoughts /buyer’s remorseChapter 3:How Timeshare Exchange Companies Mislead Timeshare OwnersRemember when you were a kid and the ice cream truck would come ring its bell as it came down the street? Everyone ran to the corner, met up with the ice cream man and waited in line to get served. Well, if for some reason by the time you got your turn, he was out of ice cream sandwiches – you were sad – but you understood they were out and you asked for something else. First come, first serve is the standard for business in America.Now let’s take the same scenario as above and imagine that after you were told there were no more ice cream sandwiches (you got the lemon Popsicle instead), the kid behind you asked for an ice cream sandwich too... but he was sold one! How did that happen?! What was different?Well this exact scenario happens to timeshare owners every single day.Timeshare does not work on the honor system of first come, first serve – in fact, no one is equal. People own all different qualities of timeshares: Red season, Gold Crown, 5 Star, 2 bedrooms, low demand locations, etc.… this is an unfair system where no one is treated the same. And here’s where it gets worse – you remember that kid behind you at the ice cream truck? Well he was the same “quality” as you – he just had more money to spend.You see, your exchange company is never working in your best interest, like a bank they are working in their best interests on your collateral. They love having you standing in line because you are going to buy something, but they save the “good ice cream” for the highest bidder.So how does an exchange company find a “higher bidder” if everyone pays the same exchange rate? We’ll answer this in a minute.The exchange companies got smart a number of years ago and devised terms and conditions which encouraged you to give up your valuable week without getting inventory back immediately. This was called a deposit in the Space Bank system or the Deposit and Exchange System. How they tricked Joe Consumer into this was a sales sleight of hand akin to three card Monte!The Exchanges created a virtual swap meet where you deposit your valuable timeshare week, yet you didn’t get anything immediately back. As a matter of fact, the exchange company you are dealing with says “OK, I’ll take this and maybe – three to five months later I will give you something back in exchange.”Here’s the problem with that: even if the Exchange doesn’t offer you something of equal value or more desirable than the week you gave up – you can’t get your original week back. As a matter of fact, their contract reads that they can give you absolutely ANYTHING in exchange for your deposit and you have to accept it. So right now, all across the world, people are giving up their valuable weeks or points up to the exchange company in hopes that many months later they will have something of equal or greater value at another destination. Unfortunately, this almost never happens.Remember the question we asked earlier, ‘how does the exchange company find the highest bidder if everyone pays the same exchange fees’? Well, here is how they do it in front of your own eyes, without you even realizing what is happening:Let’s take the information we just learned and analyze how the exchange companies were able to perfect this art of illusion. As we can all agree, the exchange companies were very smart in devising this “give me yours now and I’ll tell you what you can get for it later” scheme. The perception from your view was “I put in one week and take another one out” – kind of like the honor system.Instead of this honor system, however, the exchange companies perfected the early deposit system. They essentially told you that if you were having problems getting the locations you wanted, you just were not depositing your week early enough. The exchange companies told you to deposit your home resort up to a year in advance, because “the earlier you give it to us, the better your shot of getting a prime time week!” This never worked out for the majority of timeshare owners, and in fact, gave the exchange companies even more time to profit from your deposit.All this new “miracle method” did was give the exchange companies more time to SELL your inventory to a non-timeshare owner for MORE MONEY!The reason why you can’t get your desired exchange week is because the exchange companies mark them up (sometimes $ 1,000 more than what an exchange fee is) and sell them to the highest bidder…THE TRAVEL CLUBS!Have you heard about travel clubs? Many of them are in your local metropolitan cities, inviting people into their office or local hotel and telling you why timeshare sucks (they’re right) and why their product is so much better (possibly right). The fact is that many travel clubs use the Exchange Company Feed to get properties for their club members.What is an Exchange Company Feed? It’s a direct contract, which allows a software terminal to be linked in to the exchange companies deposited inventory database. This allows travel clubs to access all of the deposited and procured inventory for say …$ 40-100 + a night. Where do these hundreds of thousands of weeks come from? That’s right, these are your deposited/ space banked weeks that you and everyone else gave to the exchange company.In other words, timeshare owners are depositing their weeks, those weeks are accessed by the travel clubs and rented to club members and the timeshare owners are getting no participation in the rent paid.For years’ exchange companies have encouraged (tricked) timeshare owners to give up (deposit) their valuable home weeks, and for that they get a week back on the exchange. So these exchange corporations, being a for profit company manage the huge pool of deposited inventory and can lease or sell access to that inventory for a significant markup, mostly to travel clubs.This is usually why you can’t get “where you want” or “when you want”. These exchange companies have found a way to put their own desperate/ trapped/ paying customers 2nd to the guy who is willing to pay more. You get the lemon Popsicle while the travel club member gets the gourmet ice cream sandwich. This is the main reason why travel clubs have become so successful. They allow their members to get a week through their travel club (which is really just your weeks deposited and then funneled through your exchange company to the travel club to their member base) for thousands less than what a timeshare costs, without the limited choices a timeshare provides and for THOUSANDS LESS IN MAINTENANCE FEE!If you always loved the timeshare resorts but hated “time sharing”, then look into purchasing travel clubs. Remember, soon you will be done with timeshare payments for good. If you ever want to vacation at a timeshare – it can now be done on your terms, when you want and how you want, and at a much cheaper price. No more being held captive to what the exchange companies want you to have and trapped paying maintenance forever.Two Scams Timeshare Owners Must Watch Out for.The moment you realize your timeshare was grossly overpriced is a painful one. If this book is the reason you are having this feeling for the first time, our sincerest apologies. Our intentions are not to offend anyone, but to provide candid and raw information. It’s not so devastating to find out that the timeshare agent misled you (I’m sure you realized this by now). I mean, sure the timeshare probably didn’t go up in value – but it’s probably worth the same, right?Nope – it’s worth virtually zero. And it’s not necessarily the salesman’s fault; it’s actually been ingrained in you and everyone in America for generations now – real estate value rises. It’s a “truth” that we have all known all our lives up until the real estate bubble collapsed in 2007. Every single person reading this has always seen real estate value increase, so you were sure that the timeshare would at least maintain its value. To be fair, the cards were incredibly stacked against you in the first place – but after the real estate bubble popped in dramatic fashion, there was zero hope.But we are all looking for that miracle to save us, right? Well be careful for these two common scams:This is a how a typical “buyer” scam goes: Ring… Ring… Ring…. “Mrs. Customer? Hi, it’s Steve over at “I’ll Say Whatever It Takes.” Yup, here we go. “We had your name on a list of persons interested in selling your timeshare over at [insert resort name here]. We have a buyer that’s interested in your property! He is willing to pay $ 23,000 for it and is ready to close now!” They make it sound like the heavens just opened up and tapped you on the shoulder to solve your timeshare woes. Great, isn’t it?For those who have never received this phone call, let’s explain how this scam ends:“Mrs. Customer, it is guaranteed that our mystery buyer is going to purchase your specific week. As a matter of fact, we will have this closed within the next week and will have the money in your hands within 30 days, guaranteed. There are NO fees for our services as the buyer is the one paying us. It’s a very simple sales process, Mrs. Customer. All you need to do is give us an escrow deposit to cover the costs to do a title search and also cover any estoppel fees. The escrow amount is only $ 3,500. Now don’t worry – its 100% guaranteed that he is going to buy this property. The best part is that once it closes, your $ 3,500 is added back into the purchase price – which means he pays it back and then we reimburse you. Guaranteed. We are so happy you are willing to sell your valuable timeshare. I’ll take your credit card information now…” And in the end, the property is never sold and you never get that escrow money you paid.This is how a typical “list your timeshare on our website” scam goes:Ring… Ring… Ring…. “Mrs. Customer? Hi, it’s Steve from http://www.yourtimesharewillneversell.com. We just wanted to let you know that your resort is currently in very high demand on our website. As a matter of fact, if you list your property on our website, we will guarantee it will get sold, or your money back.” This scam works in sheer volume, meaning that they only scam people out of $ 500-$ 1,500 at a time. Since it is a relatively small “listing fee” it works better because many people think of it as only “half” of their maintenance fee. Unfortunately, people all across the country fall for this scam. All of these people were convinced by the telemarketers guarantee that if it wasn’t sold – they could get their money back.From what we have uncovered, we can confirm how this scam actually works:The phone room contacts you and promises that they can list your timeshare on their high demand website and people for a very easy sell. As a matter of fact, “people are selling their weeks all the time on their website”. They tell you that your week should probably be valued at the amount you paid when you first bought it, for example $ 17,900. Why not list it for this price? They “guarantee to keep your valuable week on our website until its either sold by us or someone else”. Well, the scam was in the wording of that guarantee. They convince you to list your timeshare at an absurdly high price, because for you to get your money back – someone would have to buy it from their website at the inflated price of $ 17,900 – and not a penny less! Now, what about the part of the guarantee where you can get your money back “if it’s sold by someone else”? For you to get your money back from this scam, you would have to find a buyer for their suggested, over inflated, valuation price of $ 17,900! They convince you to list your timeshare on their website for a price that it could never sell for – just so the money back guarantee becomes worthless.In summary, even if you gave your timeshare away to a friend and no longer needed to list it or if you found a buyer for even $ 500, you wouldn’t get back your listing fee. With this scam there is no way you could get your listing fee back and you technically have no legal authority to request it.Please don’t fall for either of these above scams!Kiss That Timeshare Goodbye!Redemption vs. Release: In this chapter the rubber meets the road. We are going to outline the differences between Timeshare Redemption and Timeshare Release. On the surface, the only difference is if your timeshare still has an active mortgage on the deed. Now, for clarification purposes, the mortgage would still have to be with the original resort you signed with. If you still have a mortgage on the deed, we consider that Timeshare Release. If the timeshare in question doesn’t have a mortgage, then it comes under the scope of Timeshare Redemption.Timeshare Redemption as famously stated on a major redemption website: Timeshare Redemption is “The act of transferring a monetarily worthless timeshare from an individual to an inventory aggregate via a trusted corporation.” Which is just fancy talk for – “Hey, we have a large volume buyer that doesn’t deal with individuals. So pay us enough to cover our marketing costs, give us your timeshare and we will bundle ‘em up by the hundreds and sell ‘em to a broker.” The biggest advantage with this is, you never have to deal with that timeshare again! Imagine that day when you are finally timeshare free. You are no longer wondering how to handle paying large maintenance fees right after Christmas. You don’t have the stress of dealing with special assessments and hassles getting to use your week when and where you want it. It’s a great relief to many people and has become one of the easiest ways to actually become “timeshare free”.While this is a method for most timeshares, not every timeshare can easily be redeemed. There are a number of timeshares that not even the best redemption company will touch as long as they are a reputable company. Most off limits timeshares are constantly changing their policies– so call around and ask. Also, some resorts really don’t like the idea of its owners selling their weeks on their own because they don’t get any middleman costs. They can make it very complicated for these third party title companies to handle the transactions, though legally they must oblige.So, getting rid of your timeshare does exist if the mortgage is paid off.In some cases, a timeshare liquidation company simply gives your inventory back to the resort. But how did they do that? You have been trying to do the same thing for years. Before you pay any redemption company, just contact the resort itself. You must locate the on-property Broker in Charge or Owner Services Department. Its best advised to call in the month of January after your maintenance fee has been paid for that year. Let the Broker in Charge or Owner Services agent nicely know (do not be aggressive) your timeshare maintenance fee is paid for the current year, and that you would like to give up this year’s occupancy week for them to either rent or have free of charge. Let them know that “you have plans to “liquidate to a corporation” and you wanted to give them “the first right of refusal”. For a small percentage of resorts, they would rather take your deeded week back and use it for their inventory purposes over having it float around on the World Wide Web. However, if your timeshare has any past due or ‘soon due’ payments– you can forget about the idea of them easily taking it back.Timeshare Release: If you answered YES to any of the bullet points in Chapter 2 (where we covered possible fraud in the inducement) – pay attention! It’s going to get good. In the next chapter not only will we give you VERY VALUABLE expertise and proprietary knowledge – but this is one of the ways to possibly get back the money you already spent on your timeshare and void the balance of your contract.More often than not you may void the balance of a timeshare loan but not receive any funds back from what was already paid. If you can get out of the balance of the loan, it’s better than paying for the whole contract, even if you feel you were defrauded and tricked into purchasing. While doing our research for this book, word got out on various blogs about its pending release. We had people trying to get to this information even before the book was finished. These people who are just like you sent us daily emails outlining their horror stories about still owing $ 20,000 - $ 60,000 on their impulsively bought timeshares. It feels so great that the secrets enclosed in this book coupled with the application of these principals can stop you from having to pay this money. Spend a trifle to save $ 40,000 from them? No problem!ACTION PLANChapter 6:Plan of Attack (Secrets Revealed)Here is your plan of attack for the Timeshare Release. Each step has a specific course to take; each step must be done in the consecutive order listed below and with exact detail. Make sure you SEND ALL DOCUMENTS CERTIFIED MAIL, RETURN RECEIPT REQUESTED. You must maintain and proof that the creditor and resort received your upcoming notices. Include copies, not originals, of any additional documents, sales slips, or material received from sales agent or resort that supports your claim of fraud when asked.It is now time to send the opening letters to both the resort and the mortgage company, if applicable. In these opening letters we force them to have a very strong awareness of your complaint and the penalties they may face if they don’t cancel your timeshare agreement.Phase 1: Opening Letters#1) Send Resort Intro Letter#2) Send Creditor Intro Letter (if you have outstanding mortgage only)Each letter is also supplied to you template in Microsoft Word. You will simply fill in your details and list your complaints (From Chapter 2), print, sign and send using CERTIFIED MAIL.LETTER ONE – RESORT (USE WORD TEMPLATE)DateJoe Consumer1234 Any StreetAny Town, USA 12345Evil Timeshare ResortBroker in Charge555 Bad Value StreetAny City,USA 12345Dear Sir or Madam:I am writing to dispute a billing error in the amount of $ [_ALL TOTAL MONIES PAID SO FAR TO FINANCE COMPANY__] on my account. The amount is inaccurate because the sales representative at the point of sale committed fraud in the inducement for the following purchasing points: [list of all applicable points of fraud as outlined in Chapter 2].(You will be using this list of allegations in the WORD templates)Possible “fraud in the inducement” bullet points:1)This offer is good for today only.2)That timeshare is in hot demand3)That timeshare is a great investment4)That timeshare – like real estate will appreciate in value over time.5)The timeshare presentation is only going to be 90 minutes.6)The timeshare is in such demand it could always be RENTED for a profit.7)You are buying pre-construction and this timeshare can be SOLD for a profit after the next “phase.”8)This week/ resort is such a valuable week to all of the exchange companies that you can trade for "anytime, anywhere."9)This maintenance fee will not increase over time – or…10)You will be attending an "update" to discuss questions (also called a policy change, owners update, etc.… - Later it was actually a sales presentation).11)This is not timeshare but Vacation Ownership or Vacation Property.12)(You) were subjected to high pressure sales tactics or felt that you could not leave the presentation without purchasing timeshare?13)The timeshare sales agents plied us with champagne (or other alcohol)14)The timeshare sales agents assured us we could cancel if we had second thoughts /buyer’s remorseI am demanding that the error be corrected, that any finance and other charges related to the disputed amount be credited to my account forthwith, and that I receive an accurate statement immediately. There are a number of publicly visible complaints and negative reviews about your company in many public travel forums. It seems your organization is well aware of these issues. Please investigate this matter and correct my billing error as soon as possible.Please govern yourself accordingly,Joe Consumer[Signature]LETTER ONE – CREDITOR LETTER (if applicable)DateJoe Consumer 123 Any Street Any Town, USA 12345LOAN # 3345552Take My Money, Inc.Billing Inquiries555 Mortgage Greed WayAny City, USA 12345Dear Sir or Madam:Re: Account Number_I am writing to dispute a billing error in the amount of $ [_ALL TOTAL MONIES PAID SO FAR TO FINANCE COMPANY__] on my account. The amount is inaccurate because the sales representative at the point of sale committed fraud in the inducement for the following purchasing points: [list of all applicable points of fraud as outlined in Chapter 2].(You will be using this list of allegations in the WORD templates)Possible “fraud in the inducement” bullet points:1)This offer is good for today only.2)That timeshare is in hot demand3)That timeshare is a great investment4)That timeshare – like real estate will appreciate in value over time.5)The timeshare presentation is only going to be 90 minutes.6)The timeshare is in such demand it could always be RENTED for a profit.7)You are buying pre-construction and this timeshare can be SOLD for a profit after the next “phase.”8)This week/ resort is such a valuable week to all of the exchange companies that you can trade for "anytime, anywhere."9)This maintenance fee will not increase over time – or…10)You will be attending an "update" to discuss questions (also called a policy change, owners update, etc.… - Later it was actually a sales presentation).11)This is not timeshare but Vacation Ownership or Vacation Property.12)(You) were subjected to high pressure sales tactics or felt that you could not leave the presentation without purchasing timeshare?13)The timeshare sales agents plied us with champagne (or other alcohol)14)The timeshare sales agents assured us we could cancel if we had second thoughts /buyer’s remorseI am demanding that the error be corrected immediately, that any finance and other charges related to the disputed amount be credited to my account forthwith, and that I receive an accurate statement. Please investigate this matter and correct the billing error as soon as possible.Please govern yourself accordingly,Joe Consumer[Signature]Remember, the purpose of these demand letters is not to cancel the timeshare – that’s an unrealistic expectation at this stage of the process. The purpose of these initial demand letters is to put on record your formal disputes. The creditor must acknowledge your complaint in writing within 30 days after receiving it, unless the problem has been resolved. The creditor should resolve the dispute within two billing cycles after receiving your letter.Once you have sent letters #1 & #2 out, you must give them time to respond before proceeding to the next step in this timeshare cancellation process. The resort just might offer a settlement in compromise and you don’t want to show your next play before they make their move.More likely than not, you will not get a favorable response from either the resort or the finance company as it is too early in the cancellation process for them to have a favorable motivation to act upon your cancellation request. Don’t worry; their lack of a favorable response is part of the plan and they probably think you are going to go away easily.The truth is that the resort has no clue about the fury you are in the process of bringing them because you are now fully empowered by this book.*ALERT*The creditor or resort will try to contact you over the phone. They will ask to record the phone call “for quality purposes”, of course. Be very careful of the language they use and the questions they ask. If you do not feel comfortable with the line of questioning, request to only communicate via certified mail. No matter how much they attempt to appease you, let them know you feel victimized and you no longer want anything to do with the resort purchase you financed. Advise them that the payments are currently under dispute and you are currently reviewing avenues afforded to you by the legal system to protect consumers.DO NOT threaten to sue them in this conversation – you are most likely dealing with Owner Services and not the legal department. There is more discretion on their part to assist you and recommend to their superiors that your contract should be voided. You should inform them that once they void this agreement you will just go away and will not continue protest the creditor or the resort and its sales tactics.*ALERT*You must give the resort and creditor the full 30 days to respond to your initial letters. It is very probable that your demands will not be met at this point. If they choose to either ignore your letters or not respond favorably, it is time to send the Resort and Creditor Follow Up Letters (Phase Two - Follow Up Letters)Phase 2:LETTER TWO – RESORT (USE WORD TEMPLATE)Joe Consumer123 Any Street Any Town,USA 12345DateEvil Timeshare ResortBroker in Charge555 Bad Value Street Any City,USA 12345Dear Sir or Madam:Account Number:Ref: Real Estate Commission laws, Federal Trade Commission StatutesI am writing to demand that you reimburse me the value of [all monies paid in so far] paid to your resort since our initial meeting on [date signature signed] My claim is made on the grounds that a sales associate employed by you maliciously misrepresented your resort in a manner in which to commit fraud in the inducement. You are jointly and severally liable for any and all misrepresentations by your authorized associate (s). And as such, are in clear violation of various state and federal statutes.The services were not rendered as presented, the product was not as represented and I have been unable to resolve my complaint with the Broker in Charge or any persons of authority. You are liable for any misrepresentation or breach of contract under state laws. I hereby make claim that I am a victim of false and /or deceptive advertising and marketing of a vacation plan as outlined by the Federal Trade Commission.I look forward to a full and prompt response to this letter within 14 days.Yours faithfully,[Insert your signature]Joe ConsumerSECOND LETTER – CREDITORJoe Consumer123 Any Street Any Town,USA 12345DateTake My Money, Inc.Billing Inquiries555 MortgageGreed Way Any City,USA 12345Dear Sir or Madam:Account Number: [insert account number] Ref: Fraud in the Inducement, and Federal Trade Commission ViolationsI am writing to demand that you reimburse me the value of [all monies paid in so far] paid to your finance company since our signing of a loan agreement [original purchase date]. My claim is made on the grounds that a sales associate employed by the resort misrepresented its resort in a manner in which to commit fraud in the inducement. You are jointly and severally liable for any misrepresentation by the resort in which you offer financing for this transaction. And as such, are in clear violation of various state and federal statutes.I am writing to request that you reimburse me the value of [all monies paid so far] as payment towards the said timeshare property.The services were not rendered, the product was not as represented and I have been unable to resolve my complaint with the Broker in Charge or any persons of authority. You are liable for any misrepresentation or breach of contract under state laws. I hereby make claim that I am the victim of false or deceptive advertising and marketing of a vacation plan as outlined by the Federal Trade Commission.I look forward to a full and prompt response to this letter within 14 days.Yours faithfully,[Insert your signature][Insert your name (printed)]Keep your expectations limited at this part of the cancellation process. We expect that only 40% of the people at this stage will have canceled their timeshare. However, each and every single one of you will have received communication from your resort by now. Finally, they will have stopped avoiding your simple calls and escalated your file to where you actually sit on someone’s desk. Every day from this stage forward you are on someone’s desk, in someone’s email – and the higher ups are debating on how to best “put out this fire”.As of right now, they are not very concerned about keeping your money – they already have it. What they are worried about is that you will become a bigger and louder problem than your money is worth to them. So, if the only way they will release you from the agreement is if they feel you have become a liability. My friends… we will show you how to become their worst nightmare.Phase 3:Final LetterPrepare for a rush of adrenaline once you realize that the big timeshare resort that bullied you around was just “acting” the entire time. The resorts know very well that they can walk you to the very ledge of horrible customer and sometimes illegal sales and there’s virtually nothing you can do about it... until now. Below we will teach you the best posturing to ensure that you are now perceived as the bully. You will find one last grand finale timeshare cancellation template that works for you as it has for people all across this nation. Send the below letter to the resort only. They truly have the power to reverse the deal. They can force the finance company to reverse the charges and relieve you of your fraudulent timeshareNow it’s time to send the final letter.FINAL LETTER[Your Name and address][Insert Date][Name of Resort]Administrative Offices[Address of Home Resort][City, State, Zip Code]Dear Administrative Offices Account Number: [insert account number]Ref: http://www.ripoffreport.com, Complaint Resolution Platform | Scambook, TripAdvisor: Read Reviews, Compare Prices & Book, Complaints Board - Complaints and Reviews, www.ftccomplaintassistant.gov, www.bbb.org, www.my3cents.com, www.pissedconsumer.com www.consumeraffairs.comI am writing to inform you that this is my last correspondence before I go on a social media and government entity campaign that will create awareness about your resort that may have chilling effects on your day-to-day business. I feel more compelled than ever to share with people, particularly people that your resort and others like yours target to buy timeshare. I feel obliged to share our recent voice mails, our email correspondence, in fact everything about my experience with your resort. I cannot, in good ethic, stand by and watch as my concerns go unanswered and unresolved and not inform others who may visit or purchase at your resort.My claim of fraud in the inducement by your employed representatives is one of dire consequences if my purchase agreement is not irrevocably and immediately cancelled.The social media platforms, which I referenced, are permanent domains that are crawled and indexed by global search engines such as Google, Bing and Yahoo on a daily basis. As I am sure you are aware, once the search engines index them, they serve as an indefinite permanent record of my experiences and warnings to others.I am writing this final letter to make you an offer in compromise on my concerns. I will no longer request that you reimburse me the value of the monies paid so far, as long as you void my current financial obligations without harm or negative reflection to my credit standing. If you provide written intentions to void my contract within the next 14 business days, I will permanently destroy my pending complaints posts on the websites I referenced in this letter.I look forward to a full and prompt response to this letter within 14 days.Yours faithfully,[Insert your signature]~You have now officially bullied the timeshare resorts. These timeshare resorts now have an easy question in front of them. Do they allow this one client who owes them a relatively small amount of money prevent them from doing what they always do – make millions of dollars? Not a chance.ConclusionCongratulations, you finally beat Goliath!You will typically receive a document in the mail relieving you of your pending finance charges and a letter voiding your agreement. It may also be accompanied with a confidentiality agreement to keep quiet the terms of the release. They will always make you go to a notary to finalize their offer, so if you are reading this from outside of the country you will need to go the closest U.S. Embassy to complete your cancellation. Remember, this is a proven step by-step process.Do not rearrange or rush any of the procedures or steps in this very specific timeshare cancellation guideline. Give the resorts 30 business days every time you send them a correspondence and be very firm with them over the phone. This proven method is the same proven method that has been used to get people out of their contracts all over the United States.We are glad our research and insight into the timeshare industry was able to educate you and help you cancel your timeshare contract forever!