3.4 Amending rules

A society can add, delete or amend its registered rules, subject to the support of a general meeting of its members and FCA approval. The FCA examines applications to register changes to rules to ensure that the proposed changes comply with the relevant legislation, and provides comments on deficient applications. No change to the rules is valid until the FCA has approved and registered the change. A society must follow its own rules for the conduct of meetings (see Section 3.2.5) when seeking the approval of its members for a rule change.

If a society’s rules are based on the model rules of a sponsoring body it may be worth contacting the sponsoring body to determine whether any changes have been made to the model rules since the society was registered, or if the sponsoring body has assisted other registered societies to make similar amendments.

Charitable community benefit societies must not amend their rules in a way that would have the effect of it ceasing to be a charity (see Section 197, Charities Act 2011). In Scotland, charitable community benefit societies registered with the Scottish Charity Regulator must notify it when a change is made to their rules, and seek its prior consent where a change to the society’s objects is planned. In England and wales further guidance is available from www.gov.uk/guidance/how-to-make-changes-to-your-charitys-governing-document. It should be noted that any amendment to the rules of a charitable community benefit society in England and Wales that benefit the trustees needs the authorisation of the Charity Commission.

Any amendment to the rules of a society that requires existing members to invest in more share capital, or increases members’ liabilities, is not binding on a member unless their written consent has been obtained. This would include a rule change that raised the minimum shareholding a member must hold to be a member.    

 

If you have any questions or suggestions for new information you would like to find in the Handbook, contact the team by email at communityshares@uk.coop