There are several legal and management considerations to be taken into account when setting up, or converting to an academy.
Registration at Companies House; setting the correct accounting reference date; adhering to the requirements of the Charity Commission and making sure you have the appropriate management structure in place are just a few of the things you’ll need to make provision for. Here are some notes to guide you:
Registering at Companies House and setting the right accounting reference date
Academies are required to be set up as companies limited by guarantee at Companies House. Irrespective of the date of registration at Companies House, academies must have an accounting reference date of 31st August to meet with Department for Education regulations. As a result, any academy that is registered during any month other than August will need to make an accounting adjustment to enable their reporting date to become 31st August.
Straddling Companies House and the Charity Commission
Even though academies are classified as exempt charities and enjoy charitable status, they are not actually registered with the Charity Commission. This means that academies effectively straddle Companies House and the Charity Commission in relation to their administration and reporting. As a result, from a management and reporting viewpoint, academies must comply with charity law, but from an accounting point of view, accounts need to meet the requirements of and be submitted to Companies House.
Getting the management structure right
When it comes to the management of the academy, the governing body or board of directors, which is made up of the head, as well as other governors need to be identified in the Articles of Association and are charged with the responsibility of managing the academy on behalf of the academy trust. In effect, the members of the academy trust are the equivalent of the shareholders in a typical trading company and the trust assumes responsibility for the appointment of the governing body.
What happens in a multi-academy situation?
In a situation where a multi-academy trust comes into play, it is the board of directors or board of trustees who are responsible for the management and organisation of the academy. This board will commonly be made up of members from each of the schools, albeit there will still be the scope for each school to make certain decisions in its own right.
If you’d welcome some guidance on the formalities of converting to an academy, you’re in the right place. Contact us today for a completely no obligation discussion about the best way forward.