Commentary on Sections Section 1:  Community benefit societies: power to restrict use of assets
10.Subsection (1) enables the Treasury to make regulations to enable community benefit societies to ensure that some or all of their assets can only ever be used or dealt with for the benefit of the community. The regulations may define which community benefit societies have this option.
11.Subsection (2) enables the Treasury to prescribe in the regulations the purposes which are for the benefit of the community to which a community benefit society may “lock-in” its assets.
12.Subsection (4) lists certain particular matters which the regulations may cover. For example it provides that the Treasury may make regulations about the procedure by which a society can adopt an asset “lock-in”; about how assets which have been “locked-in” must be dealt with in certain circumstances, such as insolvency, in which the asset “lock-in” may cease to apply; and to ensure that any person to whom “locked-in” assets are transferred can only use them for the same purposes for which the society could have used them.
13.Subsection (5) provides for the Treasury to include in the regulations other provisions for giving effect to an asset “lock-in” regime. For example, functions may be conferred on a person specified in the regulations to supervise compliance with the asset “lock-in” regime. It also permits the regulations to create criminal offences, though these may not be punishable by imprisonment for a term of more than seven years (see subsection (6)).
14.Subsection (8) requires any regulations under this section to be approved in draft by affirmative resolution in each House of Parliament before they are made.