Commentary on Sections Change of status Section 53 - Ceasing to be a community interest company
259.This section provides that a CIC cannot lose its status as a CIC except by the methods described in the following sections.  This provision is effectively part of the ‘asset lock’, since it ensures that the members of a CIC cannot get round the restrictions to which CICs are subject, by ceasing to be a CIC and then distributing the company’s assets.  If a CIC is dissolved, it is intended that the residual assets will be preserved for the community benefit, under regulations to be made under section 31.  Conversion to a charitable company under  sections 54 and 55, or to an industrial and provident society  section 56, would impose other restrictions on the distribution of assets.