What sort of organisation is Littlehempston Community Pub Limited?
Littlehempston Community Pub Limited (LCPL) is a registered society under the Co-operative and Community Benefit Societies Act 2014. This structure should ensure that the pub continues to be owned and run by the community for the foreseeable future.
Who will benefit from this venture?
The community of Littlehempston, the South Hams, Teignbridge and Torbay Districts of Devon, and supporters of the Tally Ho all over the world.
Is it a good business proposition?
We believe so, based on the record of the Tally Ho under earlier owners, and the success of other nearby village pubs. However, you should of course consider the SWOT analysis set out in the Business Plan before committing to subscribe for Shares.
However, all commercial activities carry risk and any subscription for Shares is not a loan or a deposit and the rates of return are not guaranteed. Also, the Shares may not be readily convertible to cash should you need to withdraw them.
What happens if the business gets into financial difficulties?
If this occurs then LCPL may be placed into liquidation, in which case a liquidator would be appointed who would realise the assets and distribute them to creditors. Effectively, this would mean selling the freehold of the Tally Ho (on the basis that the pub would be the main asset at the relevant point) and the creditors would be paid from the proceeds. After the payment of the creditors and the costs of the liquidator, then if there was any surplus, this would be returned to the Members.
You should note that if LCPL gets into financial difficulties, then:
- the Management Committee may have to suspend your rights to withdraw your Shares;
- the Management Committee may have to write down the value of your Shares;
- you may lose all the money you paid for your Shares.
What is the limit of my liability, should I subscribe for Shares?
Your liability as a Member is limited to the value of your shares.
How can I get back the amount I have paid for my Shares if I need to?
The only way you can get your subscription amount back is to withdraw your shares from the business. Withdrawals will be at the discretion of the Management Committee and are likely to be very limited in the first few years of trading. Withdrawals are also likely to be limited to 10% of the total share capital in any one year. Withdrawals will be dealt with in order of application.
Please refer to the Rules for further information relating to withdrawals.
Can I lose more than the value of my subscription amount if the business fails?
No, not from your position as a Member.
What protection do I have if I subscribe for Shares?
This share offer is exempt from the Financial Services and Markets Act 2000; this means you have no right of complaint to an ombudsman. A registered society is registered with but not authorised by the Financial Conduct Authority and therefore the money you pay for your shares is not safeguarded by any depositor protection scheme or dispute resolution scheme.
Who are the people organising this?
The people organising this share offer are a group of local people who believe passionately in preserving the Tally Ho and increasing its customer base and profitability (their details are set out on the Who we are page). These people are also the Management Committee of LCPL. Collectively there is a wealth of business and community experience within the Committee.
Are there any restrictions on becoming Members?
Members must be aged 16 or over. There is no requirement to be resident in the community – just a desire to support the cause.
Who are the Members of Littlehempston Community Pub Limited?
Anyone who owns a share is a Member.
What are the rights attaching to the Shares?
Each Member has only one vote at general meetings, irrespective of the number of shares they own. Further details regarding the rights attaching to the Shares are set out in the Rules.
How is the pub be run?
The pub is run by a Manager and other full-time and part-time paid staff, employed by the Management Committee, on behalf of LCPL, and supported by volunteers. The key decisions in relation to the running of the pub will be made by the Management Committee.
Only Members may be elected to serve on the Management Committee. Members of the Management Committee elected by the Members shall hold office (unless vacated beforehand) until the conclusion of the third Annual Members Meeting after their appointment. The Management Committee is elected each year by and from the Members at the Annual Members Meeting. The Management Committee may co-opt other members onto the Management Committee but these appointments are only valid until the next Annual Members Meeting.
Further information regarding the Management Committee (its composition, the appointment of its members and the regulation of its meetings etc) are set out in the Rules.
What is the minimum and maximum number of Shares that I can subscribe for?
You can subscribe for between 1 and 400 shares. This amounts to a subscription price of between £250 (for 1 share) and £100,000 (for 400 shares).
What do I receive from my subscription for Shares?
As stated in the Rule 8.5: “Holders of shares will be rewarded primarily through a social dividend rather than a monetary dividend.”
The first return is the knowledge that your subscription will be helping the community keep a pub open in Littlehempston – where it’s been at the heart of the village for the last 350 years. However, LCPL can pay interest on share capital up to a level sufficient to attract and retain the investment. The Management Committee anticipates that LCPL will pay interest at a rate similar to that which you would receive from a savings account, but there is no commitment or guarantee to that. All interest payments will be at the discretion of the Management Committee, who will make their decisions based on the needs of the business.
As mentioned before, we also hope that subscriptions for Shares in LCPL will qualify for tax relief under the Enterprise Investment Scheme.
What is the Enterprise Investment Scheme (EIS)?
EIS is a government scheme to give investors a financial incentive to invest in smaller, higher-risk ventures. It works by giving a series of tax reliefs, the most notable in this instance is that an individual whose shareholding qualifies can expect to claim income tax relief at a rate of 30% (provided Shares are held for over 3 years). There are various qualifying criteria for both the relevant entity (in this case LCPL) and the individual. There is no guarantee that EIS relief will be available for your share subscription and your decision as to whether to buy shares should not assume that you qualify for EIS relief.
Can my Shares go up and down in value?
The value of your Shares cannot increase beyond their face value. Their value may be reduced if the liabilities of the business increase or the value of its assets decrease.
Rule 8.6 states that “on the solvent winding-up of the Society, holders of shares will have no financial entitlement beyond the payment of outstanding interest and repayment of paid up share capital.”
Can I transfer my shares to someone else?
No, unless you die or become bankrupt.
Will I have a say in what happens at the pub? What happens if I don't like how the business is being run?
Each Member will have a vote at Annual and Special Members Meetings. 12 Members or 10% of all Members (whichever is less) can require the Secretary of LCPL to convene a Special Members Meeting to consider any matter which concerns them.
Will meetings of the Management Committee be open to shareholders?
Whether or not Management Committee meetings are open to Members is at the discretion of the Management Committee.
Will Members be expected to volunteer their services?
The Business Plan doesn’t rely on Members volunteering but we certainly hope to provide opportunities behind the bar and in the kitchen for those that are interested. There should also be plenty of opportunities for Members to get involved in cleaning, decorating, gardening and general DIY efforts to get the pub up and running again.
Has this sort of thing been done before?
Yes! Have a look at the links page to find the websites of many other community owned pubs that appear to be thriving.