Overview

This bill aims to help co-operative and community benefit societies raise money for environmentally friendly projects by allowing them to issue a new type of share, called a "green share". These shares have restrictions on how they can be used and traded, ensuring the funds are used for their intended purpose and protecting against potential misuse.

Description

Green Shares

The bill introduces "green shares," a new type of share that co-operative and community benefit societies can issue to raise capital specifically for environmentally sustainable investments. These investments must significantly contribute to at least one environmental sustainability goal (e.g., creating a low-carbon society or maintaining biodiversity) without significantly harming other goals. Green shares are transferable but not withdrawable. Holders have one vote regardless of the number of shares held and receive only the nominal value upon redemption or liquidation, preventing excessive profit-taking.

Restrictions on Conversion and Capital Distribution

The bill adds restrictions on how co-operative and community benefit societies with green shares can be converted into companies and how they distribute their capital surpluses. Regulations will be created to permanently prohibit the distribution of capital surpluses in some cases, ensuring the funds remain dedicated to environmental purposes. Conversion to a company will also be more difficult for those with green shares.

Treasury Powers and Regulations

The Treasury is given significant power to make regulations on various aspects of green shares, including their issuance, rights of holders, repayment, and terms and conditions. The Treasury can also create pilot schemes to test the bill's impact and prevent unintended consequences, particularly concerning tax avoidance and fraud.

Government Spending

The bill doesn't directly involve government spending. The cost of implementing and enforcing the regulations created under this bill will be borne by the Treasury. Exact figures are not specified in the bill text.

Groups Affected

• Co-operative and community benefit societies: They can benefit from easier access to funding for environmental projects but face new regulations regarding share issuance, conversion, and capital distribution.
• Investors: They have the opportunity to invest in environmentally sustainable projects through green shares, but with limited voting rights and return on investment.
• The Treasury: Responsible for creating and enforcing regulations, managing potential risks like tax avoidance, and covering the administrative costs.

Powered by nyModel