Community Benefit Society (CBS or Bencom)


A society registered with the Financial Conduct Authority, owned by the members. The society is established for the benefit of the community and not of its members, who do not need to be (though they can be) consumers or workers. Each member has one vote at the AGM, even if they have more than one share. Unlike with a company, the shares are not transferable and can only ever be refunded at par (usually £1). The share can never be worth more than what was paid for them. A CBS must be established with a social or environmental objective, and has a non-profit constitution and an asset lock.

Accounting regulations

Must prepare accounts in accordance with:

  • Co-operative and Community Benefit Societies Act 2014
  • FRS102 (section 1A if applicable)

Tax implications

  • Subject to corporation tax
  • Can pay interest on shares; the interest is tax-deductible for the company but taxable on the recipient. The interest rate must be modest.
  • Discretionary Rates Relief is available (80% rates reduction, at the discretion of the local authority)


  • Non-profit aim is its main objective, and aims should be consistent with the 6 Co-operative Principles
  • Limited liability
  • High audit threshold – unlikely to need an audit
  • Exempt from the Financial Services and Markets Act 2000, so can advertise for loan or share investment from the public (eg in a Community Share Offer)
  • Investment reliefs (SEIS, EIS, and SITR) may be available
  • Favourable tax treatment of interest payments
  • May be eligible for some VAT exemptions such as education and culture
  • Discretionary Rates Relief is available (80% rates reduction, at the discretion of the local authority)


  • Not listed at Companies House. This creates problems for credit reference agencies and it is often not possible to get a decent credit rating.
  • More expensive to create than a limited company
  • If income is more than £90,000 in the previous year, then the accounts must be signed off by a “reporting accountant” who must be a registered auditor. This seriously limits the pool of accountants available.

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