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East Boldre Community Shop Business Model

East Boldre Community Shop Community Benefit Society (CBS)

Most shops operate as companies making money for the company owners or shareholders. Community businesses have a different legal structure and, following expert advice from the Plunkett Foundation, our community shop will be set up as a Community Benefit Society (CBS).

The purpose of a CBS is to serve the broader interests of the community rather than make money for its shareholders. Any surplus (profits that are not reinvested in the business) must be distributed to benefit the community. Both the Village Hall and School Playing Fields have recently been struggling financially and these are examples of causes that the members (shareholders) of the community shop could decide to help once the business is profitable.

The CBS structure with a statutory 'asset lock' is more reassuring for grant funders. It means that any surplus can only be used for the benefit of the community and not for the benefit of its members.

CBSs are run by a management committee, typically 5 - 10 unpaid volunteers, who oversee the shop manager(s) and staff and steer the business in line with local needs.


Community Shares

Before trading starts the shop will need to raise capital for:

A community benefit society can raise money by issuing community shares. The term is applied to societies with at least £10,000 in share capital and at least 20 members, to focus on genuinely community owned ventures.

Before any issue of shares in East Boldre Community shop a share offer document would be published including a copy of the rules so that people fully understand the investment they would be making. Unlike company shares, CBS shares cannot go up in value but they can go down, meaning that members could lose some or all of the money they invest. Arguably, this encourages members to use the business and get involved in its running.


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