These FAQs are designed to give information to people interested in investing in the pub. To talk these through in person please contact Michael West on 01373 832434 or Alan Hutton at adhutton@btinternet.com

Frequently Asked Questions

What sort of company owns the Cross Keys?

It is a limited company which qualifies for the government's Enterprise Investment Scheme (EIS).

 

What is the EIS?

EIS is a government scheme to encourage people to invest in new smaller businesses. 

 

How can I invest?

Contact Michael West on 01373 832 434 or email Alan Hutton (adhutton@btinternet.com) for information on how to invest. 

 

Will I be able to qualify for EIS?

You will need to be a UK income taxpayer to qualify. Shares bought under the scheme must be kept for 3 years and in return the shareholder can claim 30% of their investment back against their tax. There are other terms and conditions and potential advantages to the shareholder of this scheme and anyone considering it should read the relevant HMRC materials and take advice. 

 

How do I find out more about EIS?

Click here for a link to the HMRC website

 

What if I am not a taxpayer?

Shares can be bought without being under the EIS scheme. EIS shareholders must not have any preferential treatment over other shareholders.

 

What price are the shares valued at? 

They are £10 shares.

 

What will be the minimum purchase? 

To help manage the shareholding the minimum share issue will be 25 shares.

 

What is the maximum purchase? 

There is a restriction that no shareholder may control more than 20% of the shares in the company.

 

How long do I have to keep them for? 

The EIS shares cannot be traded for 3 years in line with EIS rules without losing the tax benefit. After that time you will be free to

sell the shares but there is no requirement for the company to buy them back. 

 

How much share capital is to be raised?

The target will be to raise up to £300,000. About £200,000 or more has already been pledged by the core team/ steering group members.

 

What is the mechanism for exit eg departure from village, death, divorce etc? 

The shares can be reallocated to others and as part of the EIS scheme your shares do not attract inheritance tax if left to someone. 

 

What are the voting rights with shares?  

There will be one vote per share at shareholder General Meetings and on issues that require shareholder approval.

 

What will the company do with any profits? 

The view of the steering group is that In the first three years any profits will be used to refurbish or improve the Cross Keys as well as reduce the loan subject to decision by the board as elected by the shareholders. After the first three years, the elected board will make decisions on loan repayments, further investment into the pub, issue of dividends or any combination of these.

 

When do I need to make the investment? 

You can still buy shares now

 

Why is there no return envisaged for the investor in the first three years?

As part of the EIS scheme investors will get 30% of their investment back. This effectively gives them a return of 10% a year for the first three years. Whether you are an EIS investor or not this is a business being bought "for the community" and therefore the satisfaction of having the pub available is hopefully part of the reward in the first 3 years.

 

What costs are needed to get the pub in good order? 

The cost of getting the pub into good order is estimated at £50-£60k. However, this will be substantially reduced if much of the work is carried out by volunteers and friendly providers.

 

What happens in the event the operation fails? 

It is worth saying that whilst 28 pubs a week are closing across England not one community run pub has closed. However, if the Cross Keys can not be made a success it can be sold. If you are a tax payer any losses can be claimed against tax as part of EIS scheme. In addition, with property in the area continuing to increase in value along with the work that will have been done on the building it should have substantially increased in value.

 

How will the pub be run? 

The company will be run by a Board of Directors agreed by the Shareholders who will be responsible for making sure the Cross Keys meets the objectives set in the business plan. Shelley Watts, the previous tentant,  has been appointed as Manager to run the day to day business of the pub. 

 

Who will be on the Board? 

Initially the Board is expected to be made up of a number of investors who have been involved. There are a number of skill sets that the Board should have including finance, relevant business experience, marketing and property. There will also be a strong village representation as most of them live in the Corsley or Chapmanslade. Although not required by law a Company Secretary (with legal experience) would be an invaluable assset we would like to have.

 

What happens if there is a disagreement of how to run the business?  

In the first instance this will be managed by the Board and if required can be put to vote by Shareholders.

 

What are the costs of running the business? 

These have all been put together as part of the business plan and include the wages of the staff all at industry rates.  On this basis the initial investors are convinced the pub is viable to run.

 

At the moment village groups can use the Cross Keys for meetings etc. without cost, will this continue?

As a community based business there is no intention to change existing arrangements for clubs and groups to use the Cross Keys as they have in the past. If they are holding events in the function room the normal charges will continue.

 

What guarantees and liabilities will the investors be exposed too?

As a newly set up Ltd company the only liabilities the shareholders will be exposed to are the value of their shares.

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Cross Keys Inn

Lyes Green

Corsley

Wiltshire

BA12 7PB

Tel: 01373 832406

Email: info@crosskeyscorsley.co.uk

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© 2016 by  The Cross Keys Corsley steering group.

Cross Keys Corsley Limited, Private Limited Company England & Wales No 10005232