Commentary on Sections Requirements Section 31 - Distribution of assets on winding up
214.This section provides for regulations to impose restrictions on the distribution of a CIC’s assets on winding up, so that the Regulator can ensure that such assets are preserved for the community benefit.  The restrictions will only apply to any assets which remain after the company’s liabilities to creditors have been satisfied.  It is intended that regulations will provide that any such assets may only be transferred to other CICs or charities, as these organisations have an asset lock.  Regulations may in due course allow the transfer of such assets to an industrial and provident society (“IPS”) with an asset lock, once regulations establishing such an asset lock for IPSs have been made under the Co-operatives and Community Benefit Societies Act 2003.