Incorporating Academy Schools

An academy is a centrally funded independent state school run by an Academy Trust.  The Academies Act 2010 received Royal Assent on 27 July 2010.  Since then, all maintained schools have been able to apply to become an academy.  There are currently more than 800 academies open and over 1350 schools have applied to become academies since June 2010. The legislation broadened the range of schools to include primary and special schools as well as secondary.  There are many perceived advantages to conversion to an academy including: 

  • Central funding
  • Ability to set own pay and terms and conditions for staff
  • Freedom from the national curriculum subject to certain limits
  • Freedom to decide the length of the school day

The Academy Trust is set up as a charitable company. These companies cannot be set up as the standard private company available from Companies House as their constitutional documents are based on the form drafted by the Department for Education (DfE). The constitution must be approved by the DfE before the company is incorporated.

The DfE’s model acknowledges that there is no “one size fits all” and allowances are made for some amendments e.g.; in relation to the eligibility criteria for a member or governor, where there are bodies associated with the school that need to have their interests reflected, to allow for committees for the curriculum, personnel and/or other matters.

What is an Academy Trust?

It is a charitable company limited by guarantee. It is a separate legal entity and can enter into contracts and hold assets as a result. The company has members and directors. In line with the way that schools operate the directors are referred to as governors in the constitutional documents.

They are also “exempt charities”. This means that whilst charity law applies to them they are exempt from having to register with the Charity Commission. Instead, the principal regulator will be the Secretary of State for Education.

Advantages of the corporate structure

Any liability falls on the company rather than the members and the governors. The members are responsible for strategy. Their liability will be limited. Under the form provided by the DfE, this is limited to a figure not exceeding £10 should the company be wound up. The members will not be required to contribute any further sum on the winding up of the company.

  • What of the personal liability of the governors? In brief, provided that they have
  • always acted honestly, reasonably and in good faith;
  • in accordance with their duties in relation to company law; and
  • in accordance with the obligations placed upon them as charitable trustees and charitable law, they will not be subject to personal liability in their actions as a governor.

Structure of an Academy Trust

Distinctions are made between the type of academy trust set up for a single school and the type set up for a federation of schools. There are differences between the two but broadly speaking the structure is very similar.

For a single school

Memorandum of Association – This is a form signed by subscribers. The subscribers are those persons who agree to form the new company. They become the first members of the academy trust. There must be at least three of them.

It is possible to add more members at a later date if required. One member must be a chairman of the governors. The Secretary of State can also appoint members in some circumstances and if there is a body associated with the school then that body can appoint members too.

Articles of association

This is the governing document for the academy trust. It sets out:

  • The rules for the running and regulation of the trust
  • Eligibility criteria for members and governors
  • Procedure for appointing and removing governors and members
  • Voting rights for members
  • Powers for governors

The other key role is that of the governors – these are the directors of the company and trustees of the charity. There must be at least 3. They are responsible for:

  • Daily running of the academy and maintaining educational quality
  • Challenging and monitoring performance
  • Managing the trust’s finance, property and employing staff
  • Compliance with company and charity law
  • Managing and ensuring compliance with obligations imposed on the company under funding agreements with the Secretary of State.

The model articles allow members to appoint governors. In addition, there should be 2 parent governors appointed by parent election. The principal of the academy should also be a governor. Staff governors may be appointed provided that their number does not exceed 1/3 of the total number of governors.  It is also possible for the Local Authority to appoint governors and to have co-opted governors.  In addition, the Secretary of State may step in and make appointments should standards fall. 

The model articles for Academy Trusts are relatively detailed compared to those for a standard private company.  For example, they require an annual general meeting of the members and are very specific about the notices required for the meetings of governors.  These provisions are designed to protect the interests of the academy and ensure that all interests are reflected at the level of governance.  In addition, there are areas where the DfE model provides options depending upon the particular circumstances of a school.

Many academy trusts set up with a secretary appointed to provide advice and administrative assistance to the company.  Once incorporated the company has new obligations to Companies House and generally under company law, for example, in relation to the filing of accounts, the running of the annual general meetings (AGMs) and dealing with the paperwork as a result, etc.

Why choose Jordans to incorporate an Academy Trust?

Our education incorporation specialist clients have been pleasantly surprised at the speed with which we are able to incorporate this legal vehicle for academies.  Using Jordans' expert system means: 

  • If there are any issues concerning the name our experts can talk through the rules and requirements with you and help you choose a suitable alternative.
  • Electronic processing - generally if we receive instructions before 10 a.m. the company will be available within 24 hours.  Guaranteed, same day incorporations can also be made subject to a higher fee
  • Cheaper - electronic filing is less than half the price of paper filing on incorporation
  • More accurate - you have control of the documents you wish to file. More convenient - you do not have to obtain signatures from all those agreeing to be first involved with the company as members and governors

For more information on the services we have available to form and assist with the running of the academy trust as a company please contact Wendy Rees on 0117 918 1344.

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