In this section you will learn about community shares and:
- The advantages of community shares
- Whether community shares are appropriate for your co-operative
- What steps you need to take if your enterprise is considering community shares
- How The Hive can support you with one-to-one support
About community shares
Since 2009 almost 100,000 people have invested over £120 million in community shares to support over 350 community businesses throughout the UK. They are all co-operative and community benefit societies, a unique legal form that ensures these businesses are democratically run for the benefit of their members and their communities.
These societies use a special type of share capital called community shares that can be withdrawn from the business when investors want their money back.
What are community shares? Watch an animated guide:
Advantages of using community shares
- Community Shares can provide long-term, patient risk capital (i.e money that you don't have to pay back to a defined schedule, as you do with a loan). As shares can only be sold back to the enterprise, there is no risk of speculation, capital gain or take-over, so that this type of equity can be compatible with the enterprise's social purpose.
- Each member has one vote, making community shares democratic, unlike company shares where each share has a vote.
- Investors can be rewarded with payback of initial investment plus interest, linked to the performance of the enterprise.
- Community ownership means stronger connections with potential customers, workers, volunteers and suppliers, leading to competitive advantages for the enterprise.
Could community shares could be right for you?
The best place to start is the Community Shares Step-by-Step tool developed by Co-operatives UK which helps you determine whether community shares is the right route for your business or organisation. If it is, the tool then takes you through the steps involved in launching your community share offer.
Hear inspiring stories about community shares
Be inspired by three fantastic community shares stories:
Read more about how community shares have been used across different secotrs, including community retail, pubs, sports and food and farming projects on the Community Shares website.
Strengthening your share offer
The Community Shares Standard Mark is awarded by the Community Shares Unit to offers that meet national standards of good practice.
If you have been inspired to launch your own share offer, you can have it assessed for the Community Shares Standard Mark.
More about the Community Shares Standard Mark
These standards ensure that:
- The offer document and application form are easy to understand
- You are provided with all the facts you need to make an informed decision
- The facts are supported by the annual accounts and/or business plan for the society
- Nothing in the documents is purposefully incorrect, confusing or misleading
Societies are asked to sign a Code of Practice requiring them, among other things, to give the public a right of complaint to the Community Shares Unit.
For more information about the Standard Mark, including getting your share offer assessed, visit the Standard Mark section of the Community Shares website.
Get support from The Hive
The Hive can help groups and co-ops looking to raise funds through a community share offer. Find out more and apply for one-to-one support.
See also the section with advice and downloads relating to your financial projections: an important part of your business planning and important to help potential investers understand how you have worked out the investment your business requires, how you're sourcing this finance and your projections for at least three years.