The Plunkett Trust strongly recommend that communities embarking on a communal, co-operative project like ours should create a community benefit society (CBS) that can act as the legal entity handling the purchase of the pub, administration, donations, and so on. Most of the communal projects that Plunkett has helped have followed this route and we envisage doing the same. To buy the pub we will need to set up a CBS, provisionally called the "Whiteparish Community Benefit Society Ltd", which will own the pub and appoint a tenant to run it to secure its future for the benefit of the community.
The Society would be registered with the Financial Conduct Authority (FCA). Anyone who invests in the pub would automatically become a Member of the Society and have the opportunity to elect a Management Committee to manage the property and appoint tenants, and to attend the Annual General Meeting to vote on significant issues. Community Benefit Societies are, by law, intended to be democratic organisations and all Members would have an equal vote, regardless of the size of their shareholding, and the protection of limited liability. Each CBS has a registered number.
Effective governance of the Society is vital. As mentioned, the Society would be incorporated by the FCA and so would operate in accordance with applicable legislation and good practice for a community enterprise. The legal status of the Society ensures that there is an 'asset lock' so that the benefit of any assets would be retained for the community. The Management Committee will report on its management and performance at an Annual General Meeting. Key decisions will be taken on a one-member, one-vote basis. The Society's Management Committee and its Members would not have any involvement in the day-to-day operation of the pub. The business risk will belong to the tenant.
For more details on how such a Society would run, and its rules, you may like to download the rules of an existing CBS—the Beckley & Area Community Benefit Society Ltd—for interest. Please note, however, that not everything in that document would necessarily apply to the Whiteparish situation. You can download these here:- Society Rules
The Society's revenue would come from leasing the pub to an appointed tenant. Any profits (i.e. once operating expenses such as mortgage repayments, property maintenance, and professional fees have been paid) could be used for various purposes. Here are some examples from the Beckley & Area CBS website:
(Many thanks to the Beckley and Area Community Benefit Society for permission to adapt some of the text in their website for inclusion in this one.)