A ‘Community Benefit Society’ (CBS) is a legal entity registered with the Financial Conduct Authority (FCA) in accordance with The Co-operative and Community Benefit Societies Act 2014.
The FCA says that “the conduct of a community benefit society’s business must be entirely for the benefit of the community.”
A CBS has an open and voluntary membership with a genuine say in how the business is run for every shareholder.
A CBS normally has members who hold shares and are accorded democratic rights on the basis of one-member-one-vote.
A CBS is run by a Management Committee elected by Members of the Society at an Annual Members Meeting.
A CBS has a long-term commitment to reinvesting profits in the community. Any profit made by a community benefit society must be used for the benefit of the community. Unlike a co-operative society, profits cannot be distributed to members of a community benefit society.
A CBS can only use its assets for the benefit of the community. If a community benefit society is sold, converted, or amalgamated with another legal entity, its assets must continue to be used for the benefit of the community and must not be distributed to members. This asset lock is a statutory requirement under the Act.
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