1. Pros and cons of incorporation UnincorporatedIncorporated Limitation of liabilityNo: individuals may have to meet outstanding liabilities personally Yes: individual liability limited to share capital or guarantee Legal personalityNo: individuals must enter into contracts on organisation’s behalf (and are then legally liable) Yes: organisation is “legal person” and can own property and enter into contracts in own right RiskRisk unequally distributed amongst members All members treated the same unless agreed otherwise CostSmall or no start-up costsRegistration, annual fees and reporting costs AdministrationNone required by law (except for charity) but will need membership records, bank account etc Accounting and reporting requirements PrivacyTotal (unless a charity)Directors’/trustees’ personal details on public record

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 Ltd liability/ legal person? Community benefit objective? Public share offer? Return on shares?Regulator Asset lock? Ltd liability partnership  Companies House  Co ltd by shares  Only if listed Companies House  Charitable guarantee co  Charity Commission Community Interest Company Only if listed Subject to cap Companies House/CIC Regulator IPS (bona fide co-op)  FSA IPS (for community benefit) FSA

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)