9.1 An industrial and provident society is a form of legal entity which carries on a business for a public purpose. It is a society, so it has members who agree to be members and to pay a subscription to the society, and the personal liability of each member for the debts of the IPS are limited to their subscriptions (except where members know or should have known that the IPS was insolvent, and they failed to take all reasonable steps to minimise the loss to creditors). However, it is a corporate entity, so its members and employees act on behalf of the IPS and any liability would normally be incurred by the IPS rather than by the individual member or employee.
9.2 An IPS must covenant to devote its resources to the specified public purpose. Accordingly, it cannot distribute a profit to its members, but must plough back any such profit into the business. This enables it, where that purpose falls within the definition of charitable objects (see below) to obtain registration as a charity. Unless it is charitable, the IPS will pay Corporation Tax on that profit.
9.3 The most common application of an IPS is as a housing association. This derives from the historic development of the housing association movement, but it illustrates that an IPS is a flexible enough form to encompass both a local association and a large national organisation.