MRAssociates — Knowledge base
We provide the only free knowledge base in the UK dedicated to Supported Exempt Accommodation
In the same topic…
- contentWhy is exempt accommodation exempt from benefit limits?
- contentWhere does the law define “exempt accommodation”?
- contentWhat is the social sector LHA?
- contentWhat is the history of exempt accommodation?
- contentWhat is Supported Exempt Accommodation?
- contentWhat is disguised profit?
- contentWhat is a non-metropolitan county council in England?
- contentWhat is a housing association?
- contentWhat is a DWP resettlement grant?
- contentWhat are the benefit limits from which exempt accommodation is exempt?
- contentWhat are the advantages of exempt accommodation?
- contentWhat is a voluntary organisation?
- contentTell me more about registered housing associations and exempt accommodation
- contentTell me more about registered societies
- contentWhat is exempt accommodation?
- contentHow is housing benefit calculated when a person living in exempt accommodation is employed?
- contentHow is Housing Benefit calculated for exempt accommodation?
- contentHow is accommodation “provided by” a social or voluntary sector landlord?
- contentHow does the taper work for employed claimants living in exempt accommodation? (Figures)
- contentWhat is the law on exempt accommodation subsidy?
- contentSubsidy calculation when the landlord is a registered housing association
- contentHow do the housing benefit subsidy arrangements work in exempt accommodation
- contentWhat does “not trading for profit” mean?
- contentSubsidy calculation when the landlord is a charity, voluntary organisation or English non-metropolitan county council
- contentWhich landlords count as being in the social or voluntary sector?
- contentWhat is a registered charity?
- contentCan a not-for-profit body buy goods and services from its own members and directors?
- contentWhere does the law define exempt work?
- contentExamples of subsidy for exempt accommodation
Topics
What is an asset lock?
Basic info
An “asset lock” is a way of ensuring that the assets of a company or society can never be cashed in by or transferred to private individuals or other companies for their own advantage. An asset lock means that:
- While the company or society is still trading it must use its assets for a specific community benefit and may not transfer them to any person or organisation that will use them differently
- If the company or society is dissolved, any cash or other assets remaining after creditors have been paid may not be transferred to the members
- Instead the assets must be transferred to another company or society that has a similar asset lock
Whether or not a company or society adopts an asset lock depends on exactly what kind of company or society it is, but the following bodies typically do have an asset lock.
Community Interest Companies
A Community Interest Company must lock its assets: see sections 30 to 32 of the Companies (Audit, Investigations and Community Enterprise) Act 2004. The government produces model Articles of Association for a CIC which include a properly drafted asset lock.
Company Limited by Guarantee
The model Articles of Association for a company limited by guarantee do not contain an asset lock but many not-for-profit bodies incorporated as a company limited by guarantee have chosen to adopt bespoke Articles that do include an asset lock.
Registered Society
A Community Benefit Society may choose to adopt an asset lock, known as a “restriction on use” of the society’s assets. The terms of the restriction on use are set out in Schedule 1 to the Community Benefit Societies (Restriction on Use of Assets) Regulations 2006. The restriction prevents the society from transferring its assets to any other person or company apart from one with a similar asset lock.
Must a company or society have an asset lock in order to be regarded as a not-for-profit body for Housing Benefit purposes?
Not everyone agrees that an asset lock is a necessary requirement in order for a company or society to have not-for-profit status: what might or might not happen to the organisation’s assets in the future arguably has no bearing on whether it is currently trading for profit and is less important than how the organisation operates from day to day.