An open offer document should explain why the society is recruiting new members and/or encouraging new investment, and how any additional capital raised will be used by the society. The document should focus on the broader principles guiding investment decisions by the society, rather than provide details of any specific investment plans.
In comparison with a time-bound offer document, an open offer document should focus on the track record of the society rather than predictions about its future. It is, as ever, vital that high standards of accuracy, transparency and care are applied to drafting the document, as the board remain legally liable under contract and civil law. Open offer documents should contain the following information:
Purpose: The document should provide a brief description of the aims, objectives and purpose of the society, and its reasons for making an open offer of investment. It should also outline the investment policies of the society.
Returns on investment: A summary of the interest paid on share capital and the social impact of the society over at least the last three years.
Capital position: A simple description of the capital position of the society, detailing how the level of share capital, reserves and long term debt have changed over the last three years, accompanied by information about how many members have joined and how many have left.
Supporting documents: The document should explain how readers can obtain copies of the annual accounts and social reports of the society for at least the previous three years, as well as an up-to-date copy of the society’s rules.
Other basic information: This should include any relevant information listed in Section 5.2 which has not been provided elsewhere in the open offer document.
Much of the above information is captured in the annual return (AR30) a society must make to the FCA. The Community Shares Unit has designed a finance summary template that societies can use to communicate this information to members and applicants, as part of the Community Shares Standard Mark.
If you have any questions or suggestions for new information you would like to find in the Handbook, contact the team by email at [email protected]