Gardeners Rest - Neepsend

[Xabi 10]

You have rather put me off now. It does look as though there are a number of investors all of whom have invested low hundreds of pounds in the venture.

It does seem that investing say £10-20K would leave you with just one vote on such matters and a few folks with £200 each invested could pull the rug from under your feet and sell the pub to a property developer anyhow, with nothing you could do about it.

 

The motivation for such a thing to occur is slim to zero, and is probably illegal anyway under the terms of the Act which includes community shares.

 

For a start they would only get their £200 back from a sale (plus the small interest reward if they have had their money in for three years). Any profits would have to be either donated to charity or invested in another community project. Also, shares can't be bought or sold to other investors, so there's no way a person can get more than one vote.

[Mr Bloke 1,445]

The motivation for such a thing to occur is slim to zero, and is probably illegal anyway under the terms of the Act which includes community shares.

 

For a start they would only get their £200 back from a sale (plus the small interest reward if they have had their money in for three years). Any profits would have to be either donated to charity or invested in another community project. Also, shares can't be bought or sold to other investors, so there's no way a person can get more than one vote.

Excuse my ignorance then but...

 

... I'm failing to see what possible motivation a person would have to tie-up more than the very minimum amount of their hard-earned cash for 3 years into one of Sheffield's premier red-light districts?

[Xabi 10]

Excuse my ignorance then but...

 

... I'm failing to see what possible motivation a person would have to tie-up more than the very minimum amount of their hard-earned cash for 3 years into one of Sheffield's premier red-light districts?

 

Apart from the feeling of community empowerment from being a shareholder and member of the society, I think the main inducement is related to this section.

 

"The Society has applied to HMRC for advance assurance that individual investors will qualify for Social Investment Tax Relief. Individuals making an eligible investment can deduct 30% of the cost of their investment from their income tax liability, either for the tax year in which the investment is made or the previous tax year (if 2014/15 or later). The investment must be held for a minimum period of 3 years for the relief to be retained. "

[wrinkly67 10]

Hi,

Thanks for all the interest. The best place to answer your questions would be in the pub tonight (Tuesday 18th at 8 pm) if you can make it; always easier to talk things through in person. But in a nutshell, if you buy shares, you become a member of the community group. Any discussion of profits, share opts outs, can be agreed by common vote in that group. So by way of example, if the business was failing, I might propose that we sell to a property developer and that any profits from the sale go to other charities, agreed upon by common vote. Everyone could vote on my proposal and either agree with me or vote me down. But ultimately, as members of the community association, we decide collectively what the rules are.

 

You’re right when you say this isn’t a commercial investment, it’s a community one.

 

If you could make it tonight, it would be great to see you all and talk through the proposal.

 

To be honest, legalities apart, I think my biggest concern would be possible future discord amongst the "community members". You know what it's like when you get any group of people together, diverse opinions etc.

[Xabi 10]

To be honest, legalities apart, I think my biggest concern would be possible future discord amongst the "community members". You know what it's like when you get any group of people together, diverse opinions etc.

 

 

Ha true. But isn't that the same whenever you get more than two Sheffielders together in a room!

 

Had a quick look and they're nearly at 25k so quite a few people are biting!

[999tigger 10]

I think limiting the larger shareholders to the same level of voting rights is way over the top. Its unfair in the opposite direction. Hope they get to buy it though.

[Xabi 10]

I think limiting the larger shareholders to the same level of voting rights is way over the top. Its unfair in the opposite direction. Hope they get to buy it though.

 

I think it's so that after three years, when your allowed to get your money back, they don't suddenly have to find a large amount like 50k. It would only take two investments that big to take them under.

[Mr Bloke 1,445]

I think it's so that after three years, when your allowed to get your money back, they don't suddenly have to find a large amount like 50k. It would only take two investments that big to take them under.

I'm sorry but I still don't get this...

 

... why not just restrict everyone to the same investment amount then?

[Xabi 10]

I'm sorry but I still don't get this...

 

... why not just restrict everyone to the same investment amount then?

 

I guess because some people have more money available. Why not help out a good cause by parking your money somewhere, particularly if you get the money back with a little bit of interest, and its a safe bet. In practice its like an ISA!

[Nagel 10]

Who owns the pub at the moment?

[lizmachin 10]

I guess because some people have more money available. Why not help out a good cause by parking your money somewhere, particularly if you get the money back with a little bit of interest, and its a safe bet. In practice its like an ISA!

 

When you say safe like an ISA, do you mean that the government will refund your money if the wheels drop off?

[Xabi 10]

When you say safe like an ISA, do you mean that the government will refund your money if the wheels drop off?

 

No, but then again the business is separate from the building, which remains an asset that can be sold. The Gardeners is a profitable going concern, unlike some of the pubs that have undergone the process (they've had to be re-opened), so its very unlikely that, as you say, the wheels would drop off.