What is a CBS?

Over the next few weeks, you are likely to read that we are looking to save the Cross Guns by buying it for the community as a Community Benefit Society (CBS). What does that mean?

To raise the money to buy the pub, we need to ask people to buy a share in the Cross Guns. To make this possible, we need a business model.

A CBS lets us sell shares to people, and the business we create will serve the broader interests of our community, not just the people who invested.

We found a helpful video about what community shares are.

More about CBS Community Benefit Society

There are many, many CBS businesses already in existence, and it’s a well-trodden path for locals to save their pub. A CBS has to be as professionally run and regulated as a company; it’s just set up using different rules.

Everyone who buys a share in the Cross Guns will be a member and, as a member, will have a democratic right to influence the direction of the business through one-member-one-vote.

Every member will be eligible to withdraw their share and receive interest, subject to the business’s ability to afford it – of course!

Any profits we make must be used for the benefit of the whole community.

“A CBS is a legal structure to let us create a jointly-owned, democratically-controlled business to benefit OUR community. A CBS lets us sell shares to people ‘with less regulation and cost’.”

Another thing you might hear about is an asset lock. This might not sound very exciting, but it is a very important part of the CBS, and it means that no one can benefit individually if the business is wound up – remember what happened to many building societies?

In the – hopefully – unlikely event that the business fails, in a CBS, any residual money after paying debts and repaying people’s shareholding has to be given to another asset locked organisation. This helps stop people running a business into the ground to asset strip.