Community Shares are a way to raise money by offering community investors the opportunity to buy shares in your organisation. It means the investment comes from the very community which an enterprise intends to benefit.
Community Shares refers to non-transferable, withdrawable share capital that can only be issued by co-operative societies, community benefit societies and charitable community benefit societies (all types of legal organisations).
Offering community shares can be a great way to engage your local community, to test your idea and secure support for its ongoing development. You set the price and any limits on shareholdings, and shareholders become members of the business – often becoming loyal customers and participating in the running of the organisation and being able to elect people to the Board.
Community Shares are often used to raise finance to purchase community assets such as pubs, green spaces, community centres and to develop community energy schemes. In the last five years, there have been over 300 share offers in the U.K. that have raised over £82m from more than 100,000 supporters.Read the Community Shares handbook
For organisations who are interested in securing this type of investment, there are two legal structure options:
- Community Interest Company Ltd by Shares: a legal structure to consider if you want to provide an opportunity for private equity investment and be able to offer share capital and to pay limited dividends to investors. Read the full guidance here.
- Community Benefit Societies and Cooperatives: are able to make use Community Shares, enabling a community of people together to raise the money together to purchase, start-up or grow a business which benefits their community.