Unlike a
company limited by guarantee (another form favoured by businesses not primarily motivated by profit), an IPS always has a
share capital. However, in an IPS the shares cannot usually increase in value beyond their nominal amount. Often, no interest or dividend is payable on them at all, and they are voting shares only. The capital of an IPS is therefore not made up of equity shares like those in a
company limited by shares, which appreciate or fall in value with the success of the enterprise that issues them. Rather they are par-value shares, which can only be redeemed (if at all) at face value. The profits and losses of an IPS are thus the
common property of the members. The share often acts as no more than a "membership ticket", and voting is on a "one member one vote" basis. Working capital is usually provided through non-voting shares, and these are often withdrawable. Withdrawable share capital is an unusual form of finance which is treated as
equity but may be withdrawn subject to specified conditions. It has the great advantage of being exempt from the Financial Services and Markets Act, which makes the sale of securities to the public a criminal offence without compliance with expensive and onerous regulations. However, an IPS with withdrawable share capital is not allowed to carry on a banking business, presumably because a withdrawable share capital would make it impractical to ensure
capital adequacy requirements are continuously met. The terms of society shares, whether withdrawable or not, may include the payment of interest on the capital, but this may only be paid out of profits. The maximum individual withdrawable shareholding is currently set at £100,000 (although other IPSs may hold more shares than this). The limit used to include non-withdrawable shares, but this was removed in 2011. As community share offers are exempt from formal regulation, the Community Shares Unit (CSU) oversees best practice standards, intelligence and development of the community shares market. The CSU is a formal partnership between
Co-operatives UK, Locality and The Plunkett Foundation. In depth guidance on the legislation and best practice standards on running community share offers is available from The Community Shares Handbook. ==Examples==