Community benefit societies (BenComs) are incorporated industrial and provident societies (IPS) that conduct business for the benefit of their community. Profits are not distributed among members, or external shareholders, but returned to the community. For example, a nursery school might use this form to let staff take part in decision-making.
As IPS, some key characteristics of BenComs are as follows:
BenComs are not to be confused with another form of IPS - co-operatives. Co-operatives operate for the mutual benefit of their members and may or may not be a social enterprise, depending on their activities and how they distribute their profits. Co-operatives cannot be established as charities. Read information on IPS on the FSA website. BenComs and co-operatives are both regulated by the FSA. Download information on BenComs and their registration from the FSA website (PDF, 98K).
To register as a BenCom, you must demonstrate your social objectives and your reasons for registering as a society, rather than a company.
It can cost between £40 and £950 to register a BenCom with the FSA - payable each year. The fee depends on the BenCom's assets and whether it registers under self-written rules or FSA-approved rules. Download information on application fees from the FSA website (PDF, 23K).
You should seek legal advice, particularly if creating your own rules.
A registered company may, by special resolution and under certain circumstances, convert into a registered society. Conversely, members can vote to change the objectives of an IPS and convert it into a company.
Charitable BenComs must have an asset lock. Non-charitable BenComs can apply an asset lock, which protects their assets for the future benefit of the community. BenComs that do so may only convert to a Community Interest Company (CIC). See the page in this guide on Community Interest Companies.