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Pros and cons of incorporation

Pros and cons of incorporation. Other features you might want. Ability to raise money by issuing shares Ability to pay returns to shareholders Community benefit objectives Asset lock Tax breaks for organisation and/or investors Access to future community tariff (if any).

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Pros and cons of incorporation

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  1. Pros and cons of incorporation

  2. Other features you might want • Ability to raise money by issuing shares • Ability to pay returns to shareholders • Community benefit objectives • Asset lock • Tax breaks for organisation and/or investors • Access to future community tariff (if any)

  3. Choice of legal form

  4. Key features of IPS (ben com) • One member one vote • Withdrawable share capital • (Usually) exempt from prospectus regulations • £20k limit on individual shareholdings • Social dividend not financial gain • Interest not dividends • Returns limited to amount needed to retain capital (but no formal cap as for CIC) • Optional asset lock • Must register with/report annually to FSA • Can qualify for Enterprise Investment Scheme • If community tariff introduced, likely to qualify

  5. Registering an IPS (ben com) Will need: • Money (£800 - £1000) - unless CDA will pay • Time – typically 4-6 weeks from application • Rules (constitution) • Sponsor (eg Co-ops UK, Sharenergy, Wessex) • Objects clause tailored to your objectives • Name • Registered office • Company secretary • At least three subscribers (founder members)

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