What is a Community Benefit Society?

A community benefit society (CBS) is a form of co-operative whose purpose is designed to benefit the wider community. It is a limited company and must be registered with the Financial Conduct Authority rather than Companies House.

Anyone who subscribes to the objects of the society can become a member; they do not need to be either an employee or a user of the CBS. Members are entitled to vote for the Board of Directors and may bring proposals to the annual general meeting in relation to the running of the CBS.  Members can also stand for the Board of Directors. However, a CBS must not just serve its own direct community (i.e. their members) but also the wider community.

Members are considered to have a ‘share’ of a society, but they do not receive any dividend: CBSs are expected to ensure that any profits are used for the benefit of the community. There is thus no secondary purpose for the society.

A CBS can opt to have an ‘asset lock’. This means that if the company ceases to exist, any assets will be distributed for the benefit of the wider community and will not be divided among the members.

Although a CBS is a registered company rather than a charity, it is in some ways closer to a charity than a business as it operates on a not-for-profit basis.