Below, we have picked out and summarised in non-legal, plain English just a handful of the Rules that we feel may be of common interest, but we recommend that you read the whole 122 Rules of the Society comprehensively in order to fully inform yourself and to have peace of mind. Please note that the following summary is NOT the legal document, is not in the order in which it is presented in the legal document and that you should consult our actual Rules for exact terms.
The full Rules of the Society can be downloaded by clicking here.
The original share issue document can be downloaded here.
- We are an Industrial and Provident Society established for the Benefit of the Community (known as an ‘IPS Bencom’).
- Our purpose is “to carry on any business for the benefit of the community by facilitating an increase in community ownership of renewable and low carbon projects across Cumbria.” This means developing and installing renewable energy systems in Cumbria owned by a large number of people, all with equal voting rights, and using the surplus from these projects to support community and environmental activity in Cumbria.
- To be a member of the Society you must hold at least the minimum number of shares. One share = £1; the minimum share ownership is £250 and the maximum is £50,000. IPS and organisations may invest more.
- The Society will use the net annual income (i.e. net income after paying for the ‘running costs’ of the two projects) to
- pay the essential management costs of the Society (filing accounts, insurance, project management, sending our information to Members etc.);
- to build up a fund to enable us to pay back the capital that Members have invested;
- to pay an annual interest to the Members on the capital they have invested;
- use any surplus profits for “making payment for environmental, social or community purposes within Cumbria,” often referred to as the community dividend. The Society may also decide to retain some income as cash reserve to act as a contingency fund and for paying back Members who wish to withdraw their shares (see below).
- The Society is governed by an ‘Asset Lock’ which means that there are tight restrictions on how it can use its assets (Rule 97). For example, in the event of the Society running into financial difficulty, its assets cannot be taken out by any of its Directors beyond the value of their shares, but instead could only be transferred to another registered entity with similar focus on community benefit.
- Each member has one vote regardless of the number of shares he /she holds.
- The Society is only allowed to pay sufficient annual interest to attract and to retain your investment, as proposed by the Board and voted on by the Members.
- The Society is governed by a Board of Directors which is elected by the Members.
- At Board meetings there must always be a minimum of 3 Directors or 50% of Directors present (whichever is the greater number) in order to make decisions.
- At the first AGM, ALL of the Directors must stand down. At subsequent AGMs, one third of the Directors must stand down. In both instances, any Director standing down can be re-elected by Members.
- The Society will hold an AGM once a year to present accounts, declare how the Society will allocate its surplus and elect Board Members. The Society may also hold additional General Meetings.
- In addition to the elected Members, the Board may appoint up to 2 further Directors on account of their particular skills. Up to 2 Directors will be representatives from the organisation that helped to establish Community Energy Cumbria, this being Cumbria Action for Sustainability (CAfS).
- Individuals can be members, either singly or as joint membership. Organisations can also be members. It is possible for a member to hold shares on behalf of another person, e.g. someone under the age of 16.
- The Board of Directors can refuse membership and the Society will keep records of both Members and the Company Officers.
- The shares you own will be withdrawable, but not transferable. This means that you cannot sell or transfer them to anyone else, other than to the Society itself. In order to reclaim their value, the Society will buy them back from you. This will normally be for the same price that you paid for them (it cannot be more), but it may be less if the value of the shares has reduced since purchase. Normally you need to give 3 months’ notice in writing if you want to withdraw any shares; in exceptional circumstances the Society may be able to buy back the shares more quickly.
- The Board of Directors have the right to suspend share withdrawals for as long as they feel is necessary. (They might do this to prevent too many investors taking out their money all at once whilst the Society is building up a sufficient cash reserve).
- If you die, become bankrupt or are expelled from the Society you will cease to be a Member and the Society will withdraw your shares and pay their value to you or to your estate.
- If you are expecting to claim either 50% tax relief or 30% tax relief through the Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme (EIS) or forthcoming Social Investment Tax Relief (SITR), you will need to keep your shares in the Society for a minimum of 3 years.
NB: You should also be aware that for the purposes of this share offer that in applying for shares, Members will be giving their consent to receive intermediary capital repayments of their investment at the discretion of the Society, irrespective of whether Members have or have not requested repayment of their capital / shares in any particular year.