FAQ's
Everything you need to know about being a part owner of the Ickleton Lion
Q. What is a Community Benefit Society?
A. Ickleton Community Pub Limited is a Community Benefit Society. A Community Benefit Society is a legal entity that is registered with Companies House and approved by the Financial Conduct Authority. It is a member-owned organisation, democratically run by the members for the benefit of the community. Co-operatives or Community Benefit Societies have been in existence for more than 150 years. Rochdale Pioneers is recorded as one of the first groups of individuals that in 1844 set up a cooperatively owned shop near Manchester to provide its members with good quality flour, candles, and other items of primary necessity. More recently, Community Benefit Societies have been used widely as a preferred legal structure to enable communities to acquire assets such as pubs or shops and run them as a community hub to provide services for the community.
Q. What is a community pub?
A. A community pub is just as it sounds – a pub business owned and controlled by members of the community for the benefit of the community. Since the first community pub opened in the UK in 1982 there are now around 190 community pubs open and trading.
Q. Why set up a community pub?
A. Pubs are one of Britain’s oldest and most popular social institutions and play a key role in local communities. In small villages without amenities, they are particularly valuable, as they are in effect hubs in which community members can come together to interact and socialise. The value of a pub to a community is often not fully realised until it closes or is threatened with closure. Increasingly, communities have become more determined to take action in response to pub closures and have turned towards co‑operative solutions, in order to save their pub. Where there’s a pub, there’s a community.
Q. Is a community pub just a place to eat and drink?
A. As well as food and drink, community pubs can provide a wide range of additional services such as a café, a children’s breakfast club in the holidays, a repair shop, meeting spaces for groups and clubs, to name but a few. As such, they frequently become a hive of activity within the community.
Q. How are community pubs funded?
A. Community pubs are typically funded through a public share offering allowing members of the community and others the opportunity to invest. There are usually minimum and maximum investment thresholds. All shareholders (or members) have a say in the running of the business on the basis of one-member-one-vote.
Q. What are the benefits of community ownership?
A. In many cases, community pubs have been established as a means to save pubs that were otherwise destined for closure. Frequently these are the last surviving pubs in the towns and villages they serve. As well as safeguarding the ongoing availability of a key venue, the additional benefit of community ownership is that members may then have influence over the types of service provided by their pub. For example, the pub may provide additional services, such as a community meeting place or café.
Q. Why form a community pub? Why not allow it to be privately owned and run?
A.Aside from the benefits of being able to own and run the pub for the community, there is a risk – especially in the current economic climate – that no private publicans or groups wish to purchase and run the pub. Over the last two decades, more than 13,000 pubs have closed in the UK, with the property typically being sold for change of use and often ending up as housing. The Ickleton Lion is the last pub in the village and we believe it is a community asset worth saving for future generations. Once local pubs close, they are lost for good.
Q. Why should I buy community shares?
A. We will need considerable investment to purchase the pub, renovate and refurbish it, and re-establish the business for the community. Although some grants are available to assist this process, we will depend substantially on investment by the community, friends and families, and local businesses, to reach our goals. Without sufficient investment from the community, there is a risk we will be unable to buy the pub and may lose it as a village amenity.
Q. Who will benefit from this project?
A. The residents and friends of Ickleton will benefit directly from having a core amenity preserved for future generations, both through the use of the pub itself but also because the Lion – with an enhanced offering – will play a central role in making Ickleton a stronger, more vibrant, and cohesive community in which to live. Local businesses will benefit from the availability of an alternative lunch and meeting venue, and ramblers and cyclists and visitors from farther afield from what will be a lovely historic pub along their routes.
Q. Is this a good business proposition?
A. The pub must remain a profitable and sustainable business. We have carefully evaluated its strengths and weaknesses and consulted with other community pubs and advisors. Our financial projections show that it can be established as a successful and thriving business. It is also well established that communities who work together to set up such an enterprise tend to use and support it in the future.
Q. Who are the people behind this project? Do they have a personal interest?
A. The members of the Management Committee of Ickleton Community Pub Limited are local residents who care passionately about the Lion and its importance to the village. They have voluntarily contributed a large amount of time to the project and this has been supplemented with advice from many people and organisations including The Plunkett Foundation and other community pubs. They will have no personal financial interest in the project, above and beyond their own investment in community shares. Biographies of the team are available on the website.
Q. Who will run the Lion and make the day-to-day decisions about the business?
A. The Management Committee will recruit an experienced manager to manage the day-to-day running of the business. We will work closely with the manager to ensure that our community vision for the Lion is delivered but we will not micro-manage. The Management Committee will work with the manager to provide the opportunities for additional, new services which will benefit the community. Volunteers may be involved in running some of these.
Q. Can I become a member of the Management Committee?
A. At our first Annual Members Meeting, a shareholders’ election will be held to vote for nominated members of the Management Committee. In the meantime, if you want to contribute to the project, please contact us via the Contacts page on the website.
Q. Do my shares give me voting rights?
A. Yes, they do. Everyone has an equal voice, regardless of the size of their shareholding.
Q. How do I get my money back?
A. The Society’s governance rules do not allow members to sell or transfer their shares, but they can request withdrawal of their shares after the first three years the pub has been trading. You can request the withdrawal of your shares by following the procedure set out in the share withdrawal policy (which can be found on the website). Withdrawals must be funded from trading profits, reserves or new share capital raised from investors, and is at the sole discretion of the Management Committee, who have to take into account the long-term interests of the Society, the need to maintain adequate reserves, and the Society’s commitment to community benefit.
Q. Will I get my investment back if the Lion fails?
A. If the business fails, all of its assets, including the freehold of the building, would be sold and the proceeds of the sale (after paying any creditors) distributed to the shareholders up to the value of their shares. You might receive the full value of your shares back or you might lose part or all of your investment.
Q. Are joint applications allowed?
A. Yes. However, you should note that only the first named investor on the application form will be a member of the Society with voting rights. If, for example, a couple would both like to be members then each person should make a separate application.
Q. What happens to my shares if I die?
A. Your shares will form part of your inheritance. If your investments are less than £5,000, the Management Committee is permitted to transfer those to a nominated beneficiary. If they are above this amount, your shares will be dealt with as set out in your will and in accordance with probate.
Q. What are the minimum and maximum investment amounts?
A. The minimum that you can invest is £200 (i.e. 200 shares at £1 each) although we hope that most investors will invest more than the minimum. The maximum that can be invested is £100,000, which is the legal limit for investments in community benefit societies.
Q. What redress do I have if the business fails, and I lose the value of my shares?
A. This share offer is unregulated, as it is exempt from the Financial Services and Markets Act 2000 and subsidiary regulations, which means there is no right of complaint to the Financial Ombudsman, nor can you apply to the Financial Services Compensation Scheme.
Q. Will I receive interest from my shares?
A. The Society’s governance rules permit the payment of interest to members for the use of their capital, though no interest will be paid until after the pub has been trading for 3 years. Any interest payments thereafter are paid, if the business can afford it, at a rate that is sufficient to maintain our share capital but cannot exceed 5% or 2% above the bank base rate, whichever is the greater. Each year, the Management Committee will determine whether interest can be paid. Any interest will be paid gross and it is each member’s responsibility to declare such earnings to HMRC if appropriate. For more information, please read our Share Interest Policy.
Q. What happens if the share offer is under-subscribed?
A. The optimum target is £450,000 and we hope to get a grant of £45,000 and other donations to cover the cost of buying the pub and begin the refurbishment. We believe we would qualify for further grants to refurbish the pub once bought. If community investment falls short of the minimum target of £400,000, we will review whether and how to proceed. It may be possible to make up modest deficits by obtaining loan funding from recognised institutions specialising in community finance.
Q. What happens if the share offer target is reached?
A. If the maximum target of £500,000 is reached, the share offer may be closed.
Q. Who will have access to my share investment information?
A. Only those Management Committee members who require access for the purposes of their Committee role will have visibility of the information about investors and the amount invested. For more information, please read our Privacy Policy.
Q. When will I receive confirmation of my application to buy shares?
A. You should receive an email within 10 working days of your application being received by the Society to let you know we have received it and your bank transfer or cheque. Share certificates will be issued once the Society has made an offer to buy the pub and it has been accepted.
Q. What is the current level of commitment to buy shares?
A. Regular updates are being shared through our website.
Q. Does the constitution of the Community Benefit Society allow the remuneration of or reimbursement of expenses incurred by the Management Committee?
A. Members of the Management Committee are not entitled to any remuneration, but they may be reimbursed for reasonable expenses incurred in connection with the Society’s business.
Q. Do you know or have a rough idea of the predicted turnover?
A. Our financial projections have been developed by individuals with experience in the pub and catering sectors, taking into account local potential and knowledge and carefully benchmarked against similar establishments in the region. The financial projections are included in the Business Plan.
Q. Will meetings of the Management Committee be open to members and minutes published?
A. Members will be invited to participate in Members’ meetings but not Management Committee meetings. Minutes of Management Committee meetings will be available for inspection by members on request, subject to any duty of confidentiality the Management Committee may have.
Q. Should a major structural issue become apparent once the purchase is complete, are the shareholders liable for the cost of repairs?
A. We have taken advice about the condition of the building, including a formal asset valuation and an informal survey. These processes have to date not identified major structural issues, though they have identified a number of repairs and renovations that need to be done. In the unlikely event that a major structural issue were to be identified subsequent to purchase, this would be expected to be covered by building insurance, which will taken out as of the date of purchase.
Q. What happens if the share offering is over-subscribed?
A. If the share offering is over-subscribed, we may reduce the amounts we accept from investors, so as to ensure we reach our targets and at the same time maximise the number of investors that may participate.
Q. Can members pass on their shares to others?
A. No. Shares can only be sold back to the Society. The only circumstance in which shares can be transferred to others is as a part of your estate when you die.
Q. Will a prospective manager be put off by the thought of having so many members who want a say in how the pub is run?
A. Many community pubs are operated by professional managers. We will be recruiting an experienced individual to run the pub. Whilst the Management Committee will set some goals for community engagement and events, and will work with the manager to put these in place, we will not micro-manage the business nor interfere with the manager’s day-to-day running of the pub. Members may provide suggestions or feedback on the business at Members meetings or through the Management Committee.
Q. Are there any consequences for the village Social Club when the pub re-opens?
A. The Social Club and the Ickleton Lion have co-existed happily in the village for decades. They are different venues with different facilities and different purposes, and they offer quite different experiences. The Social Club is a membership organisation operated entirely by volunteers. It has recently been renovated and is building a reputation as an intimate venue for live music, as well as a social gathering place. It has no kitchen facilities and no outdoor space. The pub will be run as a commercial business, will provide an offering that is attractive to residents, local businesses and visitors from farther afield, and will complement the Social Club with a restaurant and garden, as well as a wider range of community services. We believe that both venues have a place in the village and will sit harmoniously together, as they always have done.
Q. Will I get tax relief on the amount I invest in Ickleton Community Pub Limited?
A. We have received advance assurance from HMRC that shares issued to individuals should, if circumstances remain as now, qualify under the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS).
Providing certain conditions for Ickleton Community Pub Limited and for individuals are met, this would give tax relief of 50% or 30% of the amount invested (50% for the first £250,000 shares issued). They can also be left to beneficiaries free from inheritance tax, as long as they’ve been held for at least two years at the time of death.
If you did not opt to receive tax relief on your share purchase and would like to change your mind, you can do so by emailing us at info@ickletonlionpub.co.uk
If you would like to apply for more shares now that we have this assurance, you can do so by completing the online application form.
Please click here for more information on how the tax relief on shares works.
Please note that we are unable to advise members on tax issues. It is the responsibility of each investor to make their own enquiries and satisfy themselves as to their own eligibility to claim tax relief.
Q. What happens if you don’t buy the pub?
A. If we fail to buy the pub, the money invested by shareholders will be returned to them once the pub has been officially purchased by someone else. We do not anticipate having spent any of the funds invested by shareholders prior to an offer to buy the pub being accepted so, if that is the case, shareholders would be refunded the full amounts they invested.