Checking critical content in a share offer document

The basic information that should be included in all share offer documents is covered in the Community Shares Handbook, see

A general checklist of everything covered in this diagnostic is as follows:


The business case

❑ Product or service has been identified that will appeal to the target audience

❑ Product or service is capable of generating social return on investment

❑ The social return has strong appeal to the target audience

❑ Product or service can be delivered as a profitable business activity

❑ Capital requirements of new activity is affordable to the target audience

❑ Business plan provides evidence of the long term sustainability of the new activity

❑ Evidence that any financial returns offered to investors are achievable and affordable

❑ Evidence that the enterprise will be able to honour requests for the withdrawal

of share capital within stated terms

Community building

❑ The target audience is of sufficient scale to sustain the proposed business activity

❑ Target audience is capable of developing a community identity

❑ Plan in place for communicating with the target audience and identifying supporters

❑ Known supporters can engage with the enterprise in multiple ways as investors,

customers, volunteers, providers, activists, experts and/or suppliers

❑ Supporter base is large enough to meet community investment targets

❑ Marketing plan for converting supporters into investing members

❑ Plan to involve members in governance of the enterprise

The governing document

❑ Need to establish new legal entity agreed

❑ Objectives of new entity, and need for community investment, established

❑ Agreement reached on whether to register as a co-operative society or

community benefit society

❑ Range of model rules suitable for purpose reviewed, and most appropriate selected

❑ Checked for consistency between capital requirements in business plan and model

rules on shareholdings, loans, deposits, and terms and conditions for share capital

❑ Revisions to selected model rules identified and developed with sponsoring body

❑ Name for new society agreed and checked for validity

❑ Registered office, initial subscribers, secretary and first board of directors identified

❑ Plan in place to meet all obligations of registration

The offer document

❑ The development phase of the enterprise has been identified

❑ The type of offer document planned is appropriate for the development phase

of the enterprise

❑ Draft offer document written and tested with target audience

❑ Targets, timescales and contingencies for community share offer established

❑ Plan in place for administering community share offer

Offer document check: It is helpful also to keep a checklist of everything that has to be covered in the offer document itself:

Society details

  • Society registration number
  • Name and registered address of the Society
  • Officers of the Society – give contact details of at least one Officer

Explanation of how the legal structure works

  • Description of legal structure – i.e. Cooperative or Community Benefit Society
  • Registered with (but not authorised by) FCA
  • One member one vote, irrespective of size of shareholding
  • Election of Officers at AGM
  • Surplus to benefit the community
  • Limited liability of members
  • Statutory maximum investment (£100,000 currently)
  • Availability of governing document (rules of the society), e.g. from secretary or on website
  • Committee/board elections held annually at AGM
  • Age limit for members (as in governing document)

Community shares in general

  • Face value cannot increase
  • Non-transferable except on death or bankruptcy
  • Withdrawable on application and at the discretion of the committee/board
  • Interest is payable at the discretion of committee/board and as voted at AGM
  • Not protected by FMSA so no recourse to ombudsman

This share offer

  • Purpose of the investment, vision and objectives
  • Timing of the offer (start/end dates)
  • Share offer targets (minimum, optimum, maximum) and total that needs to be raised (i.e. include the funding mix)
  • Minimum/maximum investment per shareholder
  • Projected social return
  • Projected financial return
  • Availability of the business plan, e.g. from website or secretary
  • Terms of withdrawal, such as notice period, suspensions or cap on withdrawals
  • Risk factors and mitigating actions
  • Contingency arrangements if share offer falls short or is over-subscribed
  • Failure point of offer, and resulting actions e.g. reimbursement in full
  • Tax relief explanation (if the share offer is eligible)
  • How to apply