Community Shares Standard Mark Time-bound offers for Co-operative Societies (Excel version)

This framework is applicable for new start and established organisations running a community share offer in line with best practice. 

This framework is specifically for use with co-operative societies that have a non-user member category, for share offers of a time-bound nature, i.e. raising a target amount of capital for a specific investment-ready project within a specified timescale. If the offer fails to achieve its minimum targets, or any of its contingencies, then the money is returned to investors and the investment project does not proceed.   

Note for practitioners

Please note: You should only use this assessment framework if you are confident in the distinction between a co-operative and a community benefit society. It should be understood that there can be a potential conflict of interest between user and non-user members of a co-operative society.   

For example, there is a conflict of interest between non-user members, whose voting power in co-ops is limited to 25% and so have limited power to protect their interests,  compared to user members, who can strongly influence decisions on how surplus capital is allocated to dividends, community shares capital withdrawals, and interest payments on community shares investments. Additionally, user members who are also employees have private financial benefit. 

 If this is the case, this needs to be fully understood and expressed within the share offer documents, to ensure that investors understand the situation and the impact that this could have upon their voting rights and their ability to secure a return on their investment. 

Find out more

The Community Shares Handbook outlines some of the specificities surrounding a co-operative issuing a community shares offer, including: 

• 2.1 Bona fide co-operative societies
• 2.2.3 Non-user investor shares
• 2.2.5 Multiple classes of shares
• 3.1.12 Use of profits
• 6.2 Distributions in co-operative societies
• 8.2 Income tax

Guidance is not provided on potential conflicts of interest within the Community Shares Handbook. However, Co-operatives UK provides the following :  

www.uk.coop/resources/conflict-interest-policy-template  

If a co-operative society wishes to use this assessment framework to be awarded the Standard Mark, the practitioner should first contact the Standards Manager for guidance <[email protected]>