Choose the right structure for your social enterprise

A Community Benefit Society (CBS) conducts business for the benefit of the community. They don't distribute profits to members or external shareholders but reinvest them in the community.

How Community Benefit Societies operate

Key characteristics of Community Benefit Societies include:

• They are set up with social objectives to conduct a business or trade.
• They are run and managed by their members.
• They must submit annual accounts.
• They can raise funds by issuing shares to the public.
• They can be established as charities, but only if they have only charitable goals that help the public. This lets them raise money from public grants and charities. If approved, they're called exempt charities. They report to the Financial Conduct Authority (FCA), not the Charity Commission.

Difference between a Community Benefit Society and a co-operative

Community Benefit Societies are not to be confused with co-operatives:

• Co-operatives operate for the mutual benefit of their members, depending on their activities and how they distribute their profits. Community benefit societies reflect commitment to the wider community, with profits being invested back into the business - see Co-operative Alternatives FAQ.
• Co-operatives cannot be established as charities. Community benefit societies can be established as a charity as long as it has an asset lock and charitable objectives.

The Financial Conduct Authority (FCA) provide an overview on Co-operative and Community Benefit Societies.

Co-operatives and Community Benefit Society: registration and costs

When setting up a new co-operative, you’ll need governing documents. These are different depending on the legal form your co-operative takes. Model rule templates are available from bodies such as Co-operatives UK or Co-operative Alternatives.

Registration with the Financial Conduct Authority (FCA) typically costs a minimum of £250.

However, financial support may be available through organisations like Co-operative Alternatives, which offer guidance and potential subsidies for new co-operative ventures. 

Asset locks

An asset lock protects a company or society's assets. It stops them from being transferred to private individuals, members or other companies. Charitable CBSs must have an asset lock. Non-charitable CBSs can apply an asset lock, which protects their assets for the future benefit of the community.