We will be raising the funds to build our fibre optic network by issuing Community Shares. These are a special type of investment, specifically designed to help communities to invest in local projects and they can only be issued by co-operative societies and community benefit societies. (F4RN is a Community Benefit Society).
This short video, created by the Community Shares Unit, explains how the shares work:
The key points:
- Each share costs £1. For our fibre optic scheme, the minimum shareholding has been set at £1,000 and the maximum £15,000.
- We expect investments will be eligible for a tax rebate of 50% under the Seed Enterprise Investment Scheme (SEIS). We have applied to HMRC and we will only proceed if they agree that our scheme is eligible.
- You don’t have to be shareholder to take up the broadband service but the project will only go ahead if we have enough investors.
- Everybody that owns a share has a vote in the running of the Community Benefit Society. Each person has one vote, regardless of how many shares they own.
- If the Society is successful then the Society may pay the shareholders interest on their shares – F4RN are aiming to pay interest of 4% once the year 4 accounts are audited, but this depends on the enterprise generating enough income to cover the interest payments.
- Shares are not transferable – they can only be “withdrawn” by selling them back to the Society. This will only be possible once F4RN is trading profitably and has sufficient capital in reserve to cover the share withdrawals, so share withdrawals will not be possible during the early years of the Society. Normally shares are withdrawn at their face value of £1 (no more) but the Board may decide to suspend withdrawals or to set a lower price if there are insufficient funds available.
Start-ups are inherently risky and the community venture should be considered in that light. Purchase of shares should be considered primarily as a community investment not a financial investment. The offer is not covered by the Financial Services Compensation Scheme and investors have no recourse to an ombudsman. You could lose some or all of your investment.