Industrial and Provident Societies (IPS) is an incorporated organisation, therefore a legal entity in its own right, which can be run as either a co-operative, which trade for the mutual benefit of it’s members, or a company which benefits the wider community.
Both types of IPS have a share capital made up of par value shares, which can only be redeemed (if at all) at face value. It is usually the case that a share entitles the holder to membership of the organisation.
The profits and losses of an IPS are common properties of all its members.
IPS are regulated by the Financial Conduct Authority (formerly the Financial Service Authority) in a manner similar to other company structures, and with reference to legislation relating specifically to Friendly Societies, Co-operative and Community Benefit Societies and Credit Unions.
Avantages of adopting this structure is that it provides it’s members with the same personal liability protection as an incorporated organisation but without the complexities of becoming a limited company and it can own property, employ staff and raise funds.
Disadvantages include that the governing document is very inflexible, it is a set up that many funders are unfamiar with and members may not want the responsibity of being shareholders.
Applications should be forwarded to the Finiancial Conduct Authority.
For more information please contact the Financial Conduct Authority below: