All Academy Trusts operate through the medium of a ‘Company limited by Guarantee’. They are therefore subject to Company Law, and must submit accounts on an annual basis to Companies House.
All such companies have a ‘memorandum of association’, ‘articles of association’, ‘members’, and ‘trustees’.
The following are some of the key concepts relevant to ‘the company’:
As well as being subject to Company Law, Academy schools also have charitable status and must therefore comply with Charity Law and Charity accounting guidelines for management and reporting purposes.
However, they are exempt from the requirement to register with the Charity Commission or submit accounts to the Charity Commission.
Memorandum of Association
Amongst other things, the ‘memorandum’ sets out the objectives of the company, details each member’s interest, and states the extent of each member’s liability for company debt (usually limited to a nominal £10).
Articles of Association
These are the rules which set out how the company is governed.
The members are the persons who subscribe to the company’s memorandum of association. They are not necessarily also the trustees (and it is best practice that they are not), but they do have the power to appoint or remove trustees. Members must also not be employees.
The words ‘Trustee’, ‘Director’ and ‘Governor’ can be used interchangeably in a Single Academy Trust.
However, in a Multi Academy Trust (MAT), the term governor usually refers to a local governor of an individual academy, and not necessarily a director/trustee.
The Trustees control the Academy’s management and administration, and must act in accordance with the Articles of Association & relevant law, whilst also observing best practice and guidance.
Trustees’ duties include:
- The exercise of reasonable care, skill and diligence
- Use of independent judgement
- Avoiding conflicts of interest
- Promoting the success of the trust
The trustees must appoint an ‘accounting officer’, who should be the executive leader of the trust, who has the personal responsibility for signing a ‘statement of regularity, propriety and compliance’ for submission to the EFA each year, along with the audited accounts.
In the case of a Multi Academy Trust, the trustees are likely to include representatives from each of the member schools, but trustees may also delegate certain duties to ‘local governing bodies’ which are not comprised solely of trustees.