TOPIC:

I am sorry if this subject has already been covered, but I am new to this forum, and have not - as yet - ploughed my way through the previous topics. Also, the question below may seem a little against the spirit of the venture, but is something that has to be considered by anyone who may find themselves in the position of needing their initial investment in cash form, for any unforeseen reason after the three-year period.

Because this share offer has been essentially aimed at people who do not normally invest in such businesses, and the value of shares has been set to a maximum of £20,000, there is bound to be a good deal of investors who are not exactly cash-rich, and may - once they have taken advantage of the 30% tax relief on the shares they have bought in the first year - may be forced to sell them back after the three-year period has elapsed, so as to use the cash for whatever reason they need to. I think this would apply particularly to older investors.

I fully understand that the board may decline to buy back shares after 3 years if many people apply to sell at the same time, or if funds do not allow them to sell without causing a catastrophic 'run'. Could there be any mechanism by which poorer investors who may genuinely need the cash returned after the minimum period may have the buy-back option guaranteed by the bank, or would this be unfair and unrealistic?

It has just occurred to me that the criteria for guaranteed share-withdrawal after 3 years could be applied to investors over what might be deemed 'retirement age'?

Hello Bushy.

The rules for the share withdrawal process are set out in the co-operative rules that are available in the download section.
Rule 32 a) ‘All withdrawals shall be paid in the order in which the notices were received by the Co-operative’
This, we think, is fair and it is a simple and clear way of doing this.
I know that’s not what you want but we are hoping that there will not be a massive rush to withdraw shares after the initial 3 year period!

The Co-operative will need to make provision to accommodate future share withdrawal and
this can be done by selling new shares and/ or creating a reserve through retaining profits.

It may be possible to vote on new rules regarding preference of withdrawal once the co-operative is up and running. I can check with the co-ops advisor - But current situation is as above.

Thanks
Tom

Ok, thanks for that. It is a concern for both the board and the others, I think, so worth raising.

This is something that interests me as well as i am approaching retirement age and may want to sell after 5 years or so. Maybe the board should offer to sell members shares only when a buyer becomes available. Hopefully the "business" will be a success and the board will hold a long list of potential buyers