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(1)A community body is, subject to subsection (4) below, a company limited by guarantee the memorandum and articles of association of which include the following—
(a)a definition of the community to which the company relates;
(b)provision enabling the company to exercise the right to buy land under this Part of this Act;
(c)provision that the company must have not fewer than 20 members;
(d)provision that the majority of the members of the company is to consist of members of the community;
(e)provision whereby the members of the company who consist of members of the community have control of the company;
(f)provision ensuring proper arrangements for the financial management of the company and the auditing of its accounts;
(g)provision that any surplus funds or assets of the company are to be applied for the benefit of the community; and
(h)provision that, on the winding up of the company and after satisfaction of its liabilities, its property (including any land acquired by it under this Part of this Act) passes—
(i)to such other community body or crofting community body as may be approved by Ministers; or
(ii)if no other community body or crofting community body is so approved, to Ministers or to such charity as Ministers may direct.
(2)Ministers may, if they think it in the public interest to do so, disapply the requirement specified in subsection (1)(c) above in relation to any body they may specify.
(3)In subsection (1) above, “company limited by guarantee” has the same meaning as in section 1(2)(b) of the Companies Act 1985 (c. 6).
(4)A body is not a community body unless Ministers have given it written confirmation that they are satisfied that the main purpose of the body is consistent with furthering the achievement of sustainable development.
(5)Unless Ministers otherwise direct, a community—
(a)shall be defined for the purposes of subsection (1)(a) above by reference to a postcode unit or postcode units; and
(b)shall comprise the persons from time to time—
(i)resident in that postcode unit or in one of those postcode units; and
(ii)entitled to vote, at a local government election, in a polling district which includes that postcode unit or those postcode units (or part of it or them).
(6)In subsection (5) above, “postcode unit” means an area in relation to which a single postcode is used to facilitate the identification of postal service delivery points within the area.
(7)The memorandum and articles of a company which is a community body may, notwithstanding the generality of paragraph (h) of subsection (1) above, provide that its property may, in the circumstances mentioned in that paragraph, pass to another person only if that person is a charity.
(8)In this section, “charity” means a body which is entitled, by virtue of section 1(7) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 (c. 40), to describe itself as “a Scottish charity”.
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Text created by the Scottish Executive department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Acts of the Scottish Parliament except those which result from Budget Bills
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