Asset lock

The asset lock is what stops a community interest company distributing its assets to owners. It binds the assets; it does not impose charitable purposes.

A CIC may not transfer assets other than for full consideration, except to a specified asset-locked body or with the Regulator’s consent, or for the benefit of the community. Charity law achieves a similar result differently — through purposes and trustee duties rather than a lock on the assets.

This is why a CIC is not a charity: no charitable purposes test, no public benefit requirement, no charity regulator, and no charitable tax reliefs. See CIC.