Talking Wales a Community Benefit Society

We received some good news this week, we have formally started the process of registering Talking Wales a Community Benefit Society. With support from Cwmpas we are preparing a set of rules tailored to our needs and future activity.

The rules form the basis of how we as a company will be governed. We are required to submit a set of rules that must cover 14 matters required by law.

The process has taken longer than anticipated but it is vital that we incorporate with a set of rules that align with our objectives and that will allow us to function effectively in the longer term.

Once incorporated we will be in a position, as a legal entity, to launch our pioneer share offer which will pave the way for us to prepare a full share issue and start the process of recruiting a team that will deliver our services.

The process of setting up Talking Wales as a company and service is incredibly time consuming and has incurred day to day running costs. If you’re in a position to support you can do so via the form below.

Cooperatives UK has provided the following handy explainer as to what Community Benefit Societies are and how they differ from traditional forms of company:

The purpose of a community benefit society is to serve the broader interests of the community, in contrast to co-operative societies that serve the interests of members. The 2014 Act requires a community benefit society to “carry on a business, industry or trade” that is “being, or intended to be, conducted for the benefit of the community”. But the Act does not provide any further definition or description of what a community benefit society is, creating a reliance on the FCA’s registration guidance. The FCA focuses on four key characteristics of a community benefit society:

Purpose: The FCA says that “the conduct of a community benefit society’s business must be entirely for the benefit of the community.” There can be no alternative or secondary purposes, including any that may preferentially benefit the members. 

Membership: In common with all societies, community benefit societies normally have members who hold shares and are accorded democratic rights on the basis of one-member-one-vote. The FCA says “it is not usually appropriate for a community benefit society to give any particular group of members greater rights or benefits, because the society must be conducting its business for the benefit of the community. So, for example, we would expect to see community benefit societies run democratically on the basis of one-member-one-vote.“ 

Application of profits: Any profit made by a community benefit society must be used for the benefit of the community. Unlike a co-operative society, profits cannot be distributed to members of a community benefit society. Interest on share capital is an operating expense and should be subject to a declared maximum rate (see Section 6 for more details).

Use of assets: Community benefit societies must only use their assets for the benefit of the community. If a community benefit society is sold, converted, or amalgamated with another legal entity, its assets must continue to be used for the benefit of the community and must not be distributed to members. This lock on the assets of a community benefit society can be reinforced by adopting the prescribed wording for a statutory asset lock (see Section 2.4).

The FCA registration guidance acknowledges that a community benefit society might define the community it serves, but this should not inhibit the benefit to the community at large, in other words, community benefit should not be restricted to members only. The FCA does not provide guidance on who can be a member of a community benefit society. In the context of community shares, it is assumed that membership is open to any person who supports the purpose of the society, without the distinction found in co-operative societies between user and non-user members. Normally, the FCA would expect members to be granted democratic control, based on one-member-one-vote, but it may be prepared to register societies where control has been ceded to a parent body, if that parent body can show that it can run the society for the benefit of the community.

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