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Industrial and Provident Societies


An Industrial and Provident Society (IPS) is an incorporated organisation or enterprise trading or operating for community benefit. An IPS can be run either as a co-operative (with each member having a say in the control of the IPS plus a share in the profits/losses) or as a company benefiting the wider community (in which case it may be eligible to apply for charitable status).


Examples of IPS activities include:-


  • housing co-operatives

  • working men's clubs

  • women's Institute markets

  • allotment societies

  • mutual investment companies

  • Scottish Co-operative supermarkets


An IPS has a legal identity in its own right which offers the protection of limited liability to its members.


IPS co-operatives are owned and run by the members (at least 3 individual members), with individual shareholding capped at a certain level. Each member has a vote in the control of the company. They will elect a management committee to oversee the running of the company, and profits are shared (usually distributed to members according to their contribution to the trading or business of the society).


IPS are regulated by the Finance Services Authority (FSA) in a manner similar to other company structures, and with reference to legislation relating specifically to Friendly Societies, Co-operative and Community Benefit Societies and Credit Unions.


Advantages of being an IPS


  • can own property, employ staff and raise funds in its own right

  • provides protection from unlimited personal liability for the individual members and management committee (this does not exclude liability for any negligence or failure to comply with relevant legislation)

  • benefits of incorporation without some of the complexity of forming a limited company


Disadvantages of being an IPS


  • members may not want the responsibility of being shareholders

  • inflexible standard constitution (Model Rules). If your group chooses to make too many changes to the model IPS constitution (Rules) this can hold up the registration process and incur additional setting up costs

  • unfamiliar structure for many funders and agencies


Most suitable for


Groups who:-


  • want to trade or operate for community benefit

  • require flexibility to be able to share profits amongst members

  • want to limit personal liability but are not keen on becoming incorporated as a Company Ltd by Gurantee or Community Interest Company


How to Apply


If your group is considering an IPS structure, you will need to adopt an IPS model constitution (Model Rules) and apply to the Mutual Societies Registration section of the Financial Services Authority (FSA)