Community benefit societies reflect a commitment to the wider community, with profits being invested back into the business.
In Talking Wales’s case, the community is broad and represents the community of Welsh citizens, both at home and further afield, along with the communities in which they reside, both physically and non-physically.
Our purpose is to provide news and information services that keep citizens informed on a local, national and international level.
We will do this by distributing news that has been thoroughly researched and presenting it from a Welsh perspective across a range of platforms in relevant formats for those platforms.
Our journalists will be based within the communities they are reporting from ensuring that our reporting covers the whole of Wales. As Talking Wales develops and we can recruit more journalists, these journalists will be deployed in order to reduce the physical size of patches covered by existing journalists. This will ensure the depth and breadth of our reporting will improve over time. Ensuring communities that are currently underrepresented by existing news outlets are better represented.
Unlike most companies, Community Benefit Societies are regulated by the Financial Conduct Authority and are subject to legislation under The Co-operative and Community Benefit Societies Act 2014 which came into force on 1 August 2014, consolidating and replacing previous industrial and provident society legislation, including the Industrial and Provident Societies Act 1965, which has been renamed the Co-operative and Community Benefit Societies and Credit Unions Act 1965.
Talking Wales will operate within the confines of the act.
Shares in Community Benefit Societies differ from traditional shares in a number of ways.
Community shares are non-transferable, withdrawable shares in a society with a voluntary or statutory asset lock. Members are allowed to withdraw this type of capital, subject to the rules of the society.
Societies can provide interest on the value of shares, this acts as an incentive for those who wish to support a venture through investment. This interest rate is usually set at a level above the Bank of England base rate and is subject to a maximum. The interest rate is reviewed at each Annual General Meeting.
As stated above shares are non-transferable and can only be sold back to the society, except in an instance of death where the shares are transferred to the individual’s estate to be reallocated.
There is usually a fixed period of time before shareholders can withdraw their shares with the interest accrued, this ensures liquidity within the business is maintained.
Initial share offering
Talking Wales will launch with a Pioneer Share Offering.
The purpose of a pioneer offer is to raise share capital for a new society that will be spent on getting the enterprise investment-ready. This will fund the finalizing of the business plan, and the incorporation of Talking Wales as a Community Benefit Society and lay the groundwork for the main share offer.
How many shares and how much?
Talking Wales needs to raise a significant amount to cover its setup costs and its first year of operation. It will take around three years for the company to become profitable and in a position to repay shareholders should they wish to sell their shares with the interest accrued back to the society.
We envisage shares will be made available at a cost of £50 each, with 500 being made available to Pioneers which will raise £25,000. These Pioneer Shares will be converted to ordinary shares that will accrue interest once the full share offering has been completed
The offer will be open to individuals and institutions with a minimum of 1 share being available to purchase. Individuals will be subject to a maximum purchase of 10% of the shares issued. Institutions are only allowed, by law, to purchase a maximum value of £100,000 of shares in a Community Benefit Society.
Unlike traditional shares, Community Benefit Society shares give the individual shareholder voting rights at the AGM based on a one-member-one-vote basis. This means an individual with a shareholding of one single share is afforded the same voting rights as an individual with 100 shares.
Our business plan forecast projects that Talking Wales will become profitable by its third year of operation, these profits, in the first instance, will allow for the company to pay for shares that any shareholder wishes to sell back to the company with the accrued interest along with any loan repayments that may be required dependent on the development of the business plan.
We hope to share details of our Pioneer Share issue in the coming two weeks along with more information about the amount we will be seeking to raise via the full share offer.