Community co-operatives using community shares

Who Are We?• Set up in 1982, offices across Wales,

50+members of staff

• Delivering projects on behalf of Welsh Government and the European Union

• Our vision: For Wales to be the international leader for co-operative thinking and action

• Our mission: To develop sustainable businesses and strong, inclusive communities by working co-operatively

Three key areas of work• Enterprise Support

Support to set up and run co-operatives and social enterprises, including employee buy-outs, community based co-ops and co-operative consortia. Business consultancy service provides paid-for support.

 • Digital Inclusion

Helping enterprises, community groups and voluntary organisations become more competitive and take advantage of information, services and opportunities online.

• Financial InclusionAdvising public sector organisations on how to help people avoid financial problems, and supporting credit unions in their mission to provide affordable, secure financial services to all parts of our community.

Community Shares

Glenn Bowen

Selwyn Williams

At the end of the workshop we should have an understanding of: -

• Community Shares - The Model

• Benefits of Community Shares

• Different legal forms

• Challenges of Community Shares

• How to Develop a Community Share Issue

Community Shares

Allows ordinary people to invest money in to businesses that deliver services within their

community.

Why Community Shares• Funding from the public sector is going to get more

difficult. Community shares will provide a new avenue for investment capital

• A business that is able to utilise community share capital is more likely to be able to access social loans

• Share capital is unrestricted

• Less expensive than borrowing capital from a bank

• Potential tax benefits for investors

The Community

Viable Business

Robust Business

Plan

Legal Structure

Offer Document

The Community

• Can the community afford to buy shares

• How long can they afford to leave the money within the Society

• Financial return or philanthropic investment

• How will you engage with the community and sell the vision

Pengwern Cymunedol historical and cultural context

How the community came togetherSelwyn Williams

The Community

Viable Business

Robust Business

Plan

Legal Structure

Offer Document

The Business Case• Is there a trading business idea?

• Will the communities money be safe?

• Will the business be able to earn enough money to buy back shares when necessary?

• Will the business fit in with the co-operative principles?

Legal Forms

• Company limited by Guarantee

• Company Limited by Shares

• Community Benefit Societies

• Co-operative Societies

Benefits of Community Shares• Withdrawable Share Capital

• Shareholder Democracy

• Involvement and Empowerment

• Economic Sustainability

• Asset Lock

• Interest on Shares

Community Benefit Societies• Run primarily for the benefit of non-

members “the community”

• Cannot distribute profits (can pay interest on shares)

• Can lock the assets for community benefit

• Can offer withdrawable shares

Co-operative Societies

Previously referred to as bona fide co-operatives

• Run for the benefit of the members

• Can distribute profits to the members

• Can pay interest on shares

• Can offer withdrawable shares

Pengwern Cymunedol

The finances and the business plan

Selwyn Williams

The Community

Viable Business

Robust Business

Plan

Legal Structure

Offer Document

The Offer DocumentThis should include:-

• Target amount that needs to be raised• Minimum and maximum allowable

investment• Opening and closing dates for the offer• Potential risk to the investor• How the business would deal with

multiple requests from investors to cash in their shares

Pluses and minuses of community shares in the case of Pengwern Cymunedol

And Finally Questions?Thoughts!Debate!