Section 49 - Transfer of shares etc
252.This section gives the Regulator a power to order the transfer of shares (subsection (1)) or, in the case of a CIC limited by guarantee, to extinguish the membership interests of specified members of the CIC (subsection (2)). The only interests that may be extinguished by an order under subsection (2) are the interests that a person has by virtue of being a guarantor of the CIC. If the CIC is a company limited by guarantee with share capital, the interests that any member has by virtue of being a shareholder in that CIC are unaffected by an order under subsection (2), but may be the subject of a separate order under subsection (1).
253.The power can only be exercised if it appears to the Regulator that the CIC in question is an excluded company (section 41(4)). It allows the Regulator to arrange for the control of a CIC to change hands, with a view to the CIC ceasing to be an excluded company. Without such a power the Regulator would only be able to stop the CIC being an excluded company by using the power under section 50 to seek the winding-up of the CIC.
254.The power does not apply to any share which may pay a dividend or entitle its holder to a distribution of the assets of a CIC in the event of a winding-up (subsection (3)). It is intended that under regulations made under the power conferred by section 32(3) and (4), such shares will not enable their holder(s) to control the CIC in question.