What happens to company equipment if a CIC goes under?

[Alan Milner]

Hey everyone - HNY!

I have a question that sprung to mind regarding equipment and CICs?

Now i think im correct in saying CIC gear is 'asset locked' but what does that mean in real world experience (i.e.) if our CIC had to dissolve, what would happen to the computers and digital equipment etc? Could it be used to pay any existing fines / taxes?

If not, then what exactly happens to it all?

thanks

[Alam Ahmed]

Hi, Im not sure but I think the equipment gets impounded by the relevant tax authority especially if you have taxes outstanding.

[Claire Binden]

HNY! Have you checked your governance documents? When we drew up our memorandum of association we had to nominate another organisation, in this case a local charity, to which our assets would be passed on in the event we wound up the company. This was because of the asset lock, as I understand it, the assets have to be ring-fenced for the benefit of the community. I'd imagine if we were insolvent, they'd have to be sold to pay any debts first. Would be interesting to know if any CICs have been wound up, whether insolvent or not, and what happened.

[Alan Milner]

Thanks Claire - lots of good info.

[John Mulkerrin]

Hi Alan

Normal use of existing assets to pay off liabilities, if there is a surplus within the asset lock then that surplus should be forwarded to another asset locked body. Of your choice or if you dont have a choice the CIC Regulator will look to find one similar to what you have been doing.

A quick note on this with some past experience, especially with small CICs a lot of the equipment isnt actually in the CIC at all, it is often purchased by the individuals involved and not the CIC 

[Alan Milner]

Thanks John, lots of good info.