Community benefit society

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 are instead returned to the community. It must also be set up with social objectives to conduct a business or trade.

BenComs are run and managed by their members and must submit annual accounts to the Financial Services Authority (FSA).  It can raise funds by issuing shares to the public and may be established as a charity providing it has exclusively charitable objects that are for the public benefit, allowing them to raise capital through public grants and charitable trusts.

If approved, they're known as 'exempt charities' and report to the Financial Services Authority (FSA), not the Charity Commission.  BenComs must demonstrate social objectives and provide reasons for registering as a society, rather than a company.

It costs between £40 and £950 to register a BenCom with the FSA – payable each year, depending on your assets and whether you register under self-written rules or FSA-approved rules.  It is highly advisable to seek legal advice before setting up a BenCom.

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This article is from the Artlaw Archive of Henry Lydiate's columns published in Art Monthly since 1976, and may contain out of date material. The article is for information only, and not for the purpose of providing legal advice. Readers should consult a solicitor for legal advice on specific matters. Artists can get free online legal information from Artquest.