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Community Ownership

Community ownership describes initiatives where an enterprise is created that will be owned and run by the community in which it operates. It is often created as a response to a local need for amenities or services.

The ownership is structured through use of community shares, a unique form of share capital where shares are sold in enterprises serving a community purpose. This model has been used to fund local enterprises such as shops, pubs, renewable energy schemes, food growing enterprises and others.

 

What are community shares? There is no legal definition of community shares.  It is a unique form of share capital called 'withdrawable shares' which can only be issued by co-operatives or community benefit societies registered with the Financial Conduct Authority.

  • Co-operative societies are run for the mutual benefit of their members, there is usually open membership to anyone who meets the criteria.
  • Community benefit societies are for the broader benefit of the whole community rather than just for its members so has an overarching community purpose. Both types of society can issue withdrawable shares, and they work to similar principles. A withdrawable share can be withdrawn from investment, subject to the terms and conditions of the society concerned.

All community based are set up and run on democratic principles, with a 'one member one vote' basis rather than a 'one share one vote'.

 

Withdrawable shares are very different from 'transferable shares', the type of shares normally issued by companies. To cash-in transferable shares you must first find a buyer to whom you can 'transfer' (i.e. sell) your shares, at an agreed price. Shares in larger companies are bought and sold through stock markets, but these markets do not cater for smaller companies where there are few buyers or sellers. Co-operative and community benefit societies can issue transferable shares, or shares that are both withdrawable and transferable.

The Community Shares Unit has information and resources for anyone interested in community shares and offers a dedicated support service for those interested in and involved with community share offers. Slindon Forge a community owned forge and café in West Sussex raised over £50K over 4 months towards its funding goal of £200k+ needed to turn an old forge building into a community owned shop and café.

For more information

Mike Simms (Slindon Forge)

Mike Simms (Slindon Forge – Share Offer)

 

Phone Coop is an ethical telecommunications services provider, selling everything from broadband to landline phone rental, including mobile phone services, website hosting and other internet services. FC United  F.C. United of Manchester is a co-operatively owned football club, launched in 2005 by the fans in order to provide affordable football for all. Westmill Co-op was established in 2004 to build and operate a community-owned wind farm at Westmill Farm in Oxfordshire. Fordhall Farm is a community owned organic farm in Shropshire.

 

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