It can be any formally asset-locked body (in the UK this usually means a CIC or a Charity) - but if you're not sure now David I would leave it open - use for example the following wording...
The future members at the time can decide on the asset-locked body - then seek the Regulator's approval.
Thanks very much. That makes it a lot clearer.
As another David Alexander who set up the group, welcome. I am involved in to CIC's both limited by shares and as all CIC's asset locked. Your question is slightly confusing.
As a CIC, if that what you are setting up, you are an asset locked entity which may be limited by shares or guarantee. You would only nominate another asset locked entity in your articles if you were preparing to top slice profits you make and pay them to them before you looked at dividend payments to shareholders
I agree with Geof. From the regulator's guidance:
"An asset-locked body means a community interest company, a charity, a permitted registered society or a body established outside the United Kingdom that is the equivalent to those persons".
David E Alexander, I think the question is asking about specifying an asset-locked body to transfer assets to if the CIC is wound up. This, of course, is entirely optional.
That's what I meant. and sorry if I was confused in the way I asked. I'm still finding my way in the jargon and process. All those replies were very helpful.
David Alexander and David E Alexander...thank you both of you for your guidance on this topic. I need your advice on the same topic but slightly different.
We have identified another asset locked CIC who I can nominate in our Articles of Association. My question is: Would we need to seek their permission to quote their company's name in our Articles of Association?
Any advice will be much appreciated.
Legally, no, but practically I would think you would want some sort of relationship with the other CIC or at least make them aware they are in line to receive your CIC's assets on dissolution.
Thank you very much James for your reply.
I went down the other route where I don't need to specify the asset locked organisation, rather an article saying in the case of dissolution / insolvency any residual assets will be transferred to another assets locked organisation as recommended by the regulator.