The business case is now available – please download using the link below.
Frequently asked questions
Why should I become a member?
To ensure a long term future for the Fleur de Lys as a pub. Wide spread local ownership will provide community customer and financial support for the pub and is the best way of ensuring it remains our local pub.
What is the plan?
A new legal entity called the Dorchester Community Society would be created and buy the freehold of the Fleur. The Society would let the Fleur to an experienced tenant who would take full responsibility for running it. The Society would let it on terms that would attract an experienced tenant with a proven record of success.
Who will benefit from this venture?
You will. The uncertainty about the future of the Fleur will be removed and its long term future will be assured. Community ownership will mean that its management will be more responsive to community needs.
Is it a good business proposition?
Our estimates, made on conservative assumptions, indicate that on the basis of share capital of £250,000 and 10 year loans from investors of £300,000 it should comfortably be able to meet its financial commitments until the loans have been repaid. After 10 years it will be strongly cash generative. Community ownership of pubs elsewhere have a high success rate.
What happens to my shares if the business fails?
The assets of the Society would be sold and the proceeds would first be divided between investors who had made loans to the Society. Once the loans had been repaid the remainder would be divided between shareholders up to the value of their shares, with any surplus being put to community use. The main asset of the Society will be the freehold of the Fleur – a valuable asset.
Who will run the Society?
A management committee appointed by shareholders at an annual general meeting will run the Society. Its main job will be to negotiate the lease of the pub to its tenant and ensure that the terms of the lease are observed by the tenant.
What voting rights do I have as a shareholder?
The Society will be a Community Benefit Society. Its rules are one member, one vote. So no matter how large or small your shareholding, you have an equal voice, which ensures that the wishes of the community are heard.
How much can I invest?
A single share is £100, and the maximum investment in shares is £100,000 (ie. 1000 shares). In addition, you can make a loan to the Society of at least the value you have pledged to invest as shares.
What financial return do I get?
The shares of a Community Benefit Society do not attract dividends as such, but modest interest can be paid if the Society can afford to do so. The intention is to pay the Bank of England base rate plus 1 1/2% (ie. 2% at present).
The interest rate on loans will be base rate plus 1/2% (ie. 1% at present), the lower rate than shares reflecting the facts that loans have a defined repayment profile and have prior claim on the Society’s assets if there is trouble.
When will the loans be repaid?
The loans have a term of 10 years. They will begin to be repaid in the second year, repayments being in equal instalments over the remaining 9 years.
What is my liability?
Your liability is limited to the amount of your investment in shares and loans. In the event of trouble, the loans get repaid first.
Will my investment increase in value?
The shares and loans of a Community Benefit Society cannot increase in value above their original price.
Can I realise the value of my shares?
You cannot sell the shares of a Community Benefit Society, but after three years they can be withdrawn and cancelled at the discretion of the Society’s management committee if the Society has the funds to do so.
Can I bequeath my shares in my will?
Yes. Shares can be left to an individual named in your will or to the Society where they will be used for the benefit of the community. Shares left in your will can be withdrawn by your personal representative at the discretion of the Society’s management committee.
How are the shares and loans treated for tax purposes?
Interest you receive is taxable income, and it is your responsibility to report your income to HMRC. We have not identified any scheme which gives a tax rebate or other advantage to investment in the Society.