1. What is a Community Benefit Society?
A Community Benefit Society (CBS) is a not for profit structure specifically intended to own assets for the benefit of a local community. It is a company with shares but each shareholder will only have one vote regardless of the number of shares held. Each shareholder therefore has an equal voice.
Our objective is to establish a CBS to acquire the Swan. This brings a lot of benefits, the obvious one being that the pub is owned and run by the community.
2. Why should I buy shares?
The aim is to secure the Pub completely and permanently for the benefit of the community by raising funds from shareholders, other donors and possibly grants. If we cannot raise the funds needed, the future of the Swan will be uncertain and out of our hands. Furthermore, with community ownership, the community decides how the Swan is run, developed, and improved over time.
3. Why don’t we just leave things as they are?
The current owner has made it clear that he wants to sell. He could sell to someone else (assuming a buyer could be found), but there would be no guarantees on the future of the pub and we would have no say in the way it is run.
4. What's to stop someone else from just buying the pub?
Nothing, but the current owner has been looking to sell for some time and so far without success. Also note we have a community asset order on the pub therefore we are legally entitled to a period during which we can negotiate to buy the pub. .
5. How much will we have to pay for the Swan and its renovation?
We are currently in the process of carrying out due diligence on the Swan as a business. As part of this work we have engaged professional valuers who specialise in pubs, they will provide us with a valuation report. We have also commissioned a structural survey of the pub. Once we have the valuation report and the survey and we have made broad estimates for initial renovation, this will allow us to negotiate a price with the current owner. Should we reach agreement with the current owner, at this stage we will know the sum of money required.
6. Why should I buy more than one share when anything above that gives me no more voting rights than buying just one share?
Clearly if everyone took this approach the project would fail. The one person one vote system is designed to encourage as many people as possible to become shareholders. Similar successful CBS schemes that we have looked at, have met their goals by including a range of small, medium and large contributors. We need everyone to put in as much as they can afford.
7. Can I get my money back by transferring them or selling them back to the CBS?
Shares in a CBS shares are not transferable in the same way as shares in other companies but the law allows them to be ‘withdrawn’. A share is withdrawn by the company returning to shareholder the amount paid on the share. If a shareholder asks to have a share withdrawn the return of cash depends on the CBS having enough reserves to make the payment and still meet its commercial objectives as determined by the Management Committee. Shares in the CBS can however be transferred as part of a shareholder’s estate on death.
8. If I buy shares can I get a return on the money I put in?
A CBS is a not for profit company so shareholders do not get dividends in the same way as other companies. The intention is that profits are used to develop and improve the business for the benefit of the community it serves. The CBS can however pay interest on share capital, so we intend to provide that shareholders can receive a return on their money by way of an interest payment. Payment of interest can only be made if the CBS has sufficient reserves to make the payment and to meet its commercial objectives as decided by the Management Committee.
9. Why should I buy shares in a community pub when I don’t even live in that community?
Many pubs are closing and are being redeveloped for housing. Protecting local pubs is in everyone’s interest. Having a say in how our pub is run and protecting our heritage is important and we welcome anyone from the wider community to be part of our journey.
10. How much will a share cost?
The price for each share will be determined prior to the release of the Prospectus.
11. How will my shares be registered?
All shares in the CBS will be registered by the Secretary of the CBS, you will receive a proper share certificate, and a register of shareholders will be available for public view.
12. Is there any tax relief available for shareholders?
We are currently investigating all possibilities which might benefit the CBS shareholders. Any such Tax relief or other benefits will be determined by the structure of the CBS and the any rules on taxation applicable at the time. It is important to note that we will not be in a position to provide financial advice, but we will where possible publish guidelines.
13. How can we be sure the CBS will be properly run with proper management and published accounts?
The CBS will be managed and governed by an elected Management Committee or Board. This Committee will have the responsibility for overseeing the management of the business . The Committee will be up for re-election periodically. Full accounts will be produced annually, which will be verified by an independent accountant before they are published.
14. Can the CBS sell the pub at a future time and distribute the proceeds?
No. The CBS will be established with an ‘asset lock’ which means that the shareholders cannot make a windfall capital gain from a sale of the property. If the pub is sold then the excess proceeds will go to another CBS or similar not for profit enterprise.
The whole point of the CBS buying the pub is not to sell it but to keep it and run it for the benefit of the community it serves.
15. How was the Steering Group selected?
The initial group evolved following informal discussions when the idea was hatched. The full Steering Group now consists of everyone who put themselves forward following the initial village meeting held on 13th July.
16. Will the Steering Group decide who will be running/managing the pub before I buy shares?
No, the way the pub will be run and by whom will be decided by the Community Benefit Society Management Committee. This Committee will be elected by the shareholders on a one person one vote basis once ownership is secured
17. If I have a question for the Steering Group, how do I channel it?
Please email to WestpeckhamCM@gmail.com We will try to answer your questions as quickly as we can.
18. How will you keep me updated?
We are developing a web site which should be up and running very soon. We also intend to hold regular events where the wider community can get together to hear about progress and generally discuss the project (the first event is being planned for 5th September in the Swan from 7:30) Email blasts will also be used to get information out quickly, so make sure you subscribe!
19. When is this all likely to happen?
We are working hard to pull a lot of things together, including, establishing the CBS, setting the rules, producing a business plan, gather valuation information regarding the pub and developing a project timeline. It is not possible to put a definitive timeframe to the project at this stage but we will keep everyone updated on a regular basis.