Asset Lock for Community Benefit I & P's
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The Community Benefit Societies (Restriction on Use of Assets) Regulations 2006 SI 2006/264 were made on 7th February and in force from 6th April 2006
They implement the provisions of the Co-operatives and Community Benefit Societies Act 2003 to "lock in" the value of the assets and resources of I & P societies registered as "bencoms" to benefit groups other than their own members.
This means that by amending their rules or incorporating a rule from the time of registration, any bencom, except a registered social landlord or a charity, may, by unalterable rule, prevent the payment of any amounts of value out to members or others except to pay members ,or their successors on death or bankruptcy, the nominal value of any withdrawable shares plus interest.
Otherwise any surplus has to go to another society with a similar restriction, a community interest company, a registered social landlord,or a charity - all of which lock value in for their purposes.
The FSA is given power to enforce such restrictions on surplus distribution by enforcement notice and can order restitution from society officers if the society suffers loss. It can also seek a court order to prevent or end violation of such a rule.
See http://www.opsi.gov.uk/si/si2006/20060264.htm for details