Is this a new concept? No but it is growing due to the current economy and the difficulty obtaining traditional grants and contracts. In England, Scotland and Wales there are hundreds of groups offering Community Shares for a vast array of local enterprises. Here in Northern Ireland, there are a number of interesting new groups already set up or in the process of putting together share offers.
Who can make a Community Share offer? To put forward this type of share offer, the group/enterprise will need to register as an Industrial & Provident Society such as a Community Benefit Society, and the enterprise must benefit a community in Northern Ireland.
Is it difficult to set up as a Community Benefit Society? No, not at all! You need to have governance documents (Rules) and register the new entity with DETI in Northern Ireland. There are a variety of model rules and we can help you decide the most appropriate to your group.
Do we have to give up our charitable status? No! Like any social enterprise model, the Community Benefit Society will be a separate entity set up with the specific aim of meeting a need in a local community.
Can investors demand their money back at any time? No. Investors purchase “withdrawable” shares, which can be cashed in, at the discretion of the board, subject to the terms and conditions of the share offer and the financial security of the enterprise.
Do investors get a say in the enterprise? Yes, each investor gets one vote – no matter how many shares they purchase. This democratic way of running an enterprise often fosters greater community support and engagement as investors literally buy in to a project, support the initiative and ultimately benefit from it.
Can investors benefit from tax incentives? Yes, this is possible. Investors may be eligible – under Enterprise Investment Schemes (EIS) and Social Investment Tax Relief (SITR) – for 30% to 50% cash back This is a significant benefit to the community.