Understanding Asset Locks

A Community Interest Asset Lock is a legal restriction used to safeguard its assets. It ensures that these assets are used for the benefit of the community, rather than for personal gain. Asset locks play a crucial role in maintaining the social mission of Community Interest Companies, reinforcing their community commitment .

Reasons for Implementing an Asset Lock

Firstly, preserving the Social Mission: Asset locks ensure that the assets and profits of a Community Interest Company (CIC) are dedicated to its social mission. They prevent the distribution of profits to shareholders or directors.  Moreover, this protects the CIC resources allowing it to continue its community-oriented activities without compromising its social impact.

Secondly, ensuring Long-term Stability: Asset locks provide a stable foundation for CICs, making them more resilient to external pressures or changes in ownership. Preventing asset transfers give stability to achive social objectives.

Thirdly, building Trust and Accountability: Asset locks enhance transparency and accountability within a CIC. They demonstrate the CIC’s commitment to the community, earning the trust of customers, investors, and funders. An asset lock indicates that the CIC’s activities are driven by social responsibility, not profit-seeking motives.

Asset Locked Bodies

Asset locks apply to various aspects of a CIC’s operations, ensuring that they remain dedicated to community benefit. This includes:

Firstly, Property and Physical Assets.  Land, buildings, and equipment owned by a CIC fall under the asset lock. They must be used to support the CIC’s social objectives and cannot be sold or transferred for personal gain.

Secondly, Funds and Investments: Monetary assets held by a CIC, such as grants, donations, and investments, are subject to the asset lock. These resources must be used to benefit the community, advancing the ‘s social goals.

Lastly, Profits and Surpluses: CICs are permitted to generate surpluses, but distributing them to shareholders or directors is prohibited.  Furthermore Instead, these profits must be reinvested back into the CIC to support its community-focused activities.


Asset locks play a vital role in Community Interest Companies . As shown above CIC assets are dedicated to community benefit.  Indeed asset locks reinforce the organization’s commitment to its social mission. These locks offer stability, build trust, and promote long-term sustainability. Property, funds, investments, and profits all fall under the asset lock, ensuring that they are used for the betterment of the community. By embracing asset locks, CICs can effectively preserve their social impact and make a meaningful difference in the communities they serve.

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