Information For Investors | Foundation East

Information for Investors

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Becoming a member

Any individual aged over 16 and resident in the UK, or any company whose registered offce is in the UK, can apply to become a member of Foundation East. Members have a direct say in how we work and we welcome hands-on involvement from them. Foundation East is a democratic company. Directors are elected by our members on a one-member one-vote basis at the Annual General Meeting.

Members buy shares in Foundation East, each share costs £1 and the minimum investment is £50 for individuals and £250 for incorporated companies.

A member can, at any time, increase their shareholding. The maximum total investment is £100,000 per member. Members agree to be bound by the Rules of Foundation East, which can be found here.

This information is issued by Foundation East Limited, registered number 29722R, a Registered Society registered on 2nd April 2004 under the Co-operative and Community Benefit Societies Act 2014, whose registered office is at Coppice House, 5 Greenwood Court, Bury St Edmunds, Suffolk, IP32 7GY.

Foundation East Limited is a society for the benefit of the community and is recognised by HM Revenue and Customs as an exempt charity with reference number XR74988. It controls a not-for-profit company limited by guarantee no. 4969336. Foundation East was previously called Suffolk Regeneration Trust.

Shareholdings

The minimum shareholding is £50 for individuals and £250 for incorporated companies.

The maximum shareholding is £100,000. There is no limit on the number of members Foundation East may have and no limit on the number of shares which may be issued.

Classes of Shares

There are two classes of shares: ordinary withdrawable shares of £1 each, and CITR ordinary shares of £1 each. These shares rank equally, and the only difference between them is in the rules relating to withdrawing your investment and the Community Investment Tax Relief (CITR) available for CITR shares. Foundation East is an accredited Community Development Finance Institution (CDFI). This means that your investment will qualify for Community Investment Tax Relief (CITR) of a minimum of 5% per year over 5 years if you invest in the CITR ordinary shares. Shares in Foundation East are not transferable except on death or bankruptcy.

Withdrawal of Investment - ordinary shares

The notice period for withdrawals has been set at three months and is subject to the more detailed terms and conditions set out in Foundation East’s Rules. The Directors have the right to change the notice period for withdrawal, or suspend withdrawals, either indeifnitely or for a fixed period but they do not presently intend to do so other than in exceptional circumstances. Shares will be repaid at the original price, save where the auditors of Foundation East certify there are more liabilities than assets, in which case the Directors have the right to reduce the amount payable on each share when withdrawn. In the event of Foundation East ceasing to trade, shareholders are paid up to a maximum of £1 for every £1 share, once all creditors have been paid.

Withdrawal of Investment – CITR Shares

CITR shares cannot be withdrawn within 5 years of the date of issue. After the 5-year period, the rules relating to the withdrawal of ordinary shares will apply.

Voting

Voting is on a one-member, one-vote basis regardless of the size of shareholding. Investor members will be kept informed of Foundation East’s work through the Annual General Meeting, Annual Review and Economic & Social impact report. Members are welcome in the office during working hours, by appointment, to discuss any aspects of our work.

Interest Payments

Provision is made in the Rules for paying interest on share capital. Any such interest will be paid in the form of shares in Foundation East. The Directors do not expect to pay interest in the foreseeable future.

Risk

The nature of the work of Foundation East is such that it takes risks in lending to bring social benefit. There is a risk that bad debts will exceed provisions made by Foundation East. There is also the risk that Foundation East will not maintain its current record of raising grants and other funding to cover costs which are not covered by interest and income.

The Directors will seek to protect against these risks by implementing prudent management policies.

This is a social investment, not a financial investment. Investors should regard any investment as made primarily to assist the furtherance of Foundation East’s objectives. It is not suitable for those who require a guaranteed income or ready access to capital.

The value of your shares will not increase. The value of your shares may fall.

The Directors have taken all reasonable care to ensure that any member (as well as their professional advisors) can have access at all reasonable times to all the information they may reasonably require, and reasonably expect to find, to make an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of Foundation East and of the rights attaching to their investment.

Please note that there may be other risks involved in taking up an investment in Foundation East shares and some risks may be dependent upon your individual circumstances.

If you have a concern, we recommend that you consult your independent fianancial advisor or accountant.

No Investment Protection

Foundation East is not a regulated and authorised institution under the Financial Services and Markets Act 2000 and does not accept deposits. This means there is no share or deposit protection scheme for investors. Foundation East is an exempt person from the regulated activity of deposit taking by its issue of shares pursuant to paragraph 24 of the Schedule to Financial Services and Markets Act 2000 (“FSMA”) (Exemption) Order 2001.

The shares are not a specified investment for the purpose of section 22 of FSMA pursuant to paragraph 76 of FMSA (Regulated Activities) Order 2001.

The issue of withdrawable shares, which are not transferable, exempts this information from the requirements for an approved prospectus required by Section 85(1) of FSMA.

An investment in the withdrawable and non-transferable shares of a Registered Society is not treated as a controlled investment for the purposes of section 21 of FSMA (the financial promotion prohibition) pursuant to paragraph 14(3) of Schedule 1 of the FSMA (Financial Promotion) Order 2005.

Foundation East has taken all reasonable care to ensure that every statement of fact or opinion included is true and not misleading.

Data Protection

By applying for shares you are giving consent for Foundation East to hold information in accordance with current data protection legislation. Foundation East will use your information for the maintenance of its members’ register, and may send you information about Foundation East, it's work and the work of those third parties who support it's objectives.

If you are in any doubt about any of the information stated, you should consult a person authorised for the purposes of the Financial Services and Markets Act 2000 who specialises in advising on investments of the kind identifed (e.g. an Independent Financial Advisor, Accountant or Solicitor).

Taxes

If you are not sure about how your tax position may be affected by your investment in Foundation East shares, please consult your Independent Financial advisor or Accountant.

Right of Cancellation

You have the right to cancel your investment within 14 days of the date of our letter or e-mail of acknowledgement and acceptance. To cancel the contract, you must give notice of your wish to cancel to Foundation East in writing at: Foundation East, 5 Coppice House, Bury St Edmunds, Suffolk, IP32 7GY

Your right to cancel will lapse if you do not give notice within this period.

Applicable Laws

This information, and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims), shall be governed by and construed in accordance with the law of England and Wales.

Offer Limitations

This information is only addressed to and directed at persons in the United Kingdom (“relevant persons”). Any person who is not a relevant person should not act or rely on this information.

Application Process

Any individual aged 16 or over and any company may invest in Foundation East by applying to buy shares and thereby becoming a member of Foundation East.

Applications should be made using our online application form, unless otherwise specified.

You will be notified via email and Share certificates will be issued once your application is accepted and your investment received.

The Directors reserve the right to reject any applicant in whole or in part, in which case the application monies will be returned by direct credit to the bank account or card from which the funds were originally paid.

Important Notice on Money Laundering

To ensure compliance with the Money Laundering Regulations 2007 and such similar legislation, Foundation East is required to verify the identity of each applicant.

We will verify the identity of all applicants using on-line portals where possible. If we are unable to verify you using an on-line portal we may ask you to provide us with evidence of your identity. If satisfactory evidence of identity is not provided this may result in delays and may result in your application being rejected.

Updated

This information is dated 7th July 2017 and, unless otherwise stated, the information on this page has not been updated since that date.

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