4.6.2 Structure

An open offer is not time limited or linked to a specific investment plan, which means it is not subject to the same information requirements as a time-bound offer. An open offer should normally be restricted to societies that can demonstrate that their share capital is fully withdrawable. Any initial period when withdrawals were suspended should be over, and withdrawal notice periods should be no longer than one year. If there is a restriction on the proportion of total share capital that can be withdrawn it should not be greater than the anticipated inflow of share capital resulting from the open offer. The rules of many societies have set this restriction at 10% of share capital in any one financial year. A new society, planning to launch an open offer, at the end of an initial period where share withdrawals have been suspended, should prepare a share withdrawal policy statement, especially if it anticipates that it will need to restrict withdrawals.

If a society plans to launch an open offer when the withdrawal of shares is still suspended, then the offer should be restricted to existing members, and not be promoted to the general public. This practice can be justified where a society is, or might become, reliant on expensive external sources of capital, and members are willing to provide a cheaper source of capital. 

If you have any questions or suggestions for new information you would like to find in the Handbook, contact the team by email at communityshares@uk.coop