Community Benefit Societies

Wadsworth Area Community Assets Limited is registered with the Financial Conduct Authority as Community Benefit Society No 9476

A community benefit society must serve the broader interests of the community, rather than just its members’ interests. The Financial Conduct Authority (FCA) identifies four key characteristics:

  • Purpose: The society’s business must be conducted entirely for community benefit with no alternative or secondary purposes that preferentially benefit members.
  • Membership: Membership is generally open to anyone who supports the society’s purpose, without the distinction between user and non-user members found in co-operatives.
  • Application of profits: All profits must be used for the benefit of the community and cannot be distributed to members. Interest on share capital is treated as an operating expense with a declared maximum rate.
  • Use of assets: Assets must only be used for community benefit. If the society is sold, converted, or amalgamated, assets must continue to benefit the community and cannot be distributed to members. This asset lock can be reinforced through statutory wording.

More about:

Membership

Membership in a UK Community Benefit Society (CBS) is a legal status where individuals or organisations become owners of the society by holding shares, which gives them a voice in its governance through a one-member, one-vote principle. Members support the society’s community-focused objects and have the right to access information, attend meetings, and vote on decisions. Unlike shares in a private company, CBS shares cannot be sold for a profit and are typically only withdrawable at their original value.

Key aspects of CBS membership

  • Democratic rights: Membership is based on the principle of one-member, one-vote, ensuring equal democratic power for all members, regardless of the value of their investment.
  • Community focus: Members must support the society’s objects for the benefit of the community, which is the primary purpose of the society.
  • Ownership and governance: Members are the owners of the society, and their membership provides them with the right to a voice in its affairs through meetings and voting. There will be annual elections to the Board – members can stand for election, and vote for board members each year.
  • Shareholding: Membership is typically acquired by applying for one share. These shares are not transferable on the open market and generally have no value appreciation.
  • Voting rights: All members have a voice and vote at members’ meetings, which may include attending, speaking, and submitting motions.
  • Shareholder value: Unlike private companies, members do not benefit from the appreciation in value of their shares; the society’s profits are reinvested for the benefit of the community, not distributed to members.
  • Eligibility: Anyone over the age of 16 can apply to be a member once we launch our membership drive, and a corporate body can appoint a representative.

Funding

Initially, WACA fundraising was to cover the costs of publicity and setting up the organisation. If and when we need funds to secure a specific Community Benefit Project we will be applying for relevant grants and issuing a Community Share Offer to raise significant money.

What is a Community Share Offer

A community share offer is a fundraising method where a Community Benefit Society in the UK sells shares to the public, allowing individuals to invest in and become members of the society. These shares are unique because they are not transferable or tradable on a stock market, but instead represent an equal ownership share in the project, with the possibility of the money being withdrawn under specific terms. This mechanism helps communities raise capital to fund community-focused assets like a local pub, shop, or renewable energy project.

Key features of community share offers:

  • Unique share structure: Community shares are a form of withdrawable, non-transferable share capital, distinct from shares in a typical company.
  • Member ownership: Investors become members of the society, with each member having one vote regardless of the value of the share that they hold, ensuring a democratic ownership structure.
  • Fundraising for community projects: They are used to raise funds for projects that benefit the community, such as saving local assets, building new facilities, or financing renewable energy schemes.
  • Withdrawal of capital: Shareholders can withdraw their investment, though this is subject to the society’s financial rules and terms, which are designed to protect its financial security.
  • Regulation and standards: The Co-operative and Community Benefit Societies Act 2014 governs this process. The Community Shares Unit (part of Co-operatives UK) promotes standards and offers a Community Shares Standard Mark to offers that meet best practice guidelines.