Community shares
Co-operatives and community benefit societies raise money by selling withdrawable shares to members of the community, who get a vote and a stake in a business that matters locally.
- Shares
How it works
Community shares are withdrawable, non-transferable shares that only co-operative and community benefit societies can issue. They are often used to save or start local businesses such as shops, pubs and energy projects.
- Shareholders become members. Societies are run democratically, rather than on the company principle of one share, one vote.
- Members cannot sell the shares to someone else. Instead, they can withdraw their money under the society's rules, which can set notice periods and let the board suspend withdrawals.
- The law limits each member's holding of withdrawable shares to £100,000 (other registered societies are exempt).
- Offering withdrawable, non-transferable shares is not a regulated activity and falls outside the Financial Services and Markets Act 2000. The FCA is the registrar for societies.
- The Community Shares Unit runs a voluntary Community Shares Standard Mark for offers that meet good-practice standards.
More than £200 million has been raised this way by over 126,000 people since 2012.
Upsides and downsides
Upsides
- Raises money and builds local support at the same time
- Democratic control stays with members
- Not regulated as an investment, so the offer is simpler to run
- Proof of community support can unlock loans and grants
Downsides
- Only open to co-operatives and community benefit societies
- Members can withdraw their money, so the society must plan for it
- Investors' returns are limited, which keeps offers mainly social
- No regulatory compensation scheme for investors
Risks
- Many withdrawals at once could strain the society's cash
- Not reaching the target and having to return money or rethink the project
What it costs
- How it is priced
- Shares in the society, which may pay interest on share capital
- Costs that are easy to miss
- Legal and registration costs to set up a society and its rules
- Running the offer and keeping members informed
- Money set aside so members can withdraw their shares
Any one member can hold no more than £100,000 of withdrawable shares.
Does it fit?
Could fit when
- You are a community project with strong local support
- You are, or can become, a co-operative or community benefit society
Unlikely to fit when
- You want to run a conventional company with investors seeking capital growth
Who can use it
- Business types: Co-operative or community benefit society
- Open to businesses with no sales yet
- Only co-operative societies and community benefit societies can issue community shares
- The society must be registered with the FCA as the registrar for societies
Am I ready?
What a provider is likely to ask for. Tick what you have. Your ticks stay in this browser and nothing is stored. Checklist for all crowdfunding and community finance
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- Registered society with the right rules
- Business plan
- Share offer document
Regulation and protections
Offers of withdrawable, non-transferable shares are outside the Financial Services and Markets Act 2000. The FCA registers societies and can deregister those that break society law. The Community Shares Standard Mark is a voluntary good-practice standard.
Transferable shares in a society are treated differently and may be subject to financial promotion rules.
Types of provider: Co-operative and community benefit societies (the issuer); Community Shares Unit practitioners (advice and the Standard Mark).
Also consider
Sources
- legislation.gov.uk: Co-operative and Community Benefit Societies Act 2014, section 24 · checked 7 October 2026
- Co-operatives UK: Community shares · checked 7 October 2026
- Co-operatives UK: Community Shares Handbook 2.2.1 Withdrawable shares · checked 7 October 2026
- Co-operatives UK: Community Shares Handbook 7. Regulation and guidance · checked 7 October 2026
- Co-operatives UK: Community Shares Handbook 2.2.2 Transferable shares · checked 7 October 2026
- Co-operatives UK: Community Shares Handbook 6. Share interest and use of profit or surplus · checked 7 October 2026