We have agreed that the legal format we will adopt is a Community Benefit Society. This has several advantages over a ‘normal’ limited company in that it locks in the assets making them unavailable for sale by the board now or in the future. It does still leave flexibility in how we use surpluses/ profits unlike a pure charity where all profits must be spent within the charities remit. This means that if the management committee choose to develop another income stream they can do so, generally with the shareholders blessings.
Unlike a ‘normal’ limited company shareholders only get one vote, irrespective of how much they invest in this social venture. Therefore the organisation behaves more like a cooperative.
Profits from incomes will be paid out as interest once the organisation has built up its reserves after stabilising the income generating elements of the Community Hub. e.g. a well equipped and attractive nursery and cafe/bistro as well as letting spaces and meeting rooms. So this is not expected in the early years, and investors will be made aware of this as we issue a share offer. The share offer may well be 2 offers:
Firstly: a pioneer share offer to meet the costs prior to completion of the sale e.g. legal fees, surveys, feasibility studies advertising and printing and membership fees for assisting organisations like The Plunkett Foundation and Locality both of which help in setting up successful community businesses with help and advice.
Secondly: a membership share offer to contribute towards the purchase price, repairs and set up costs. Here it is vital that we engage as many members as possible to show funders that there is a high level of support within the community and businesses in the area. Generally funding organisations are more impressed by high levels of support over a large amount raised from a small number of people.
Both offers will meet the Share Mark Standard to give confidence and ample information to prospective members / shareholders.
Details of the offer(s) will be discussed at the next management committee meeting and sent for approval to gain the Shsre Mark status.
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