PART IIICOMMUNITY INTEREST COMPANIES
Supervision by Regulator
Conditions for exercise of supervisory powers39
1
In deciding whether and how to exercise the powers conferred by Articles 40 to 49 the Regulator must adopt an approach which is based on the principle that those powers should be exercised only to the extent necessary to maintain confidence in community interest companies.
2
No power conferred on the Regulator by—
a
Article 43 (appointment of director),
b
Article 44 (removal of director),
c
Article 45 (appointment of manager), or
d
Article 46 (property),
is exercisable in relation to a community interest company unless the company default condition is satisfied in relation to the power and the company.
3
The company default condition is satisfied in relation to a power and a company if it appears to the Regulator necessary to exercise the power in relation to the company because—
a
there has been misconduct or mismanagement in the administration of the company,
b
there is a need to protect the company’s property or to secure the proper application of that property,
c
the company is not satisfying the community interest test, or
d
if the company has community interest objects, the company is not carrying on any activities in pursuit of those objects.
4
The power conferred on the Regulator by Article 47 (transfer of shares etc.) is not exercisable in relation to a community interest company unless it appears to the Regulator that the company is an excluded company.