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academies trading

Academies may want to establish a trading subsidiary for a number of reasons and these may include ring- fencing any risks associated with non-primary purpose trading; making the most of existing assets and resources to generate additional income; or avoiding breaching HMRC’s tax concession. The DfE may also require it as a condition of conversion.

When setting up a trading subsidiary, academies will need to put in place robust arrangements which go beyond simply incorporating a shelf company (ready made company). In particular, they will want to ensure they have appropriate mechanisms in place to ensure the trading company has working capital and that the governors have sufficient control over the trading subsidiary. It is therefore important to have in place a service agreement that not only sets out the basis of the provision of services between the academy and its subsidiary to ensure compliance with charity law but also to ensure that the academy has appropriate control over the activities of its subsidiary.

Our expert team will provide you with practical advice on establishing your trading company, guiding you through this process with the minimum of fuss.

Our service

For a fixed fee of £2,500 plus VAT and disbursements we will prepare the following legal documentation required to put in place your trading company:
  • board minutes (for both the academy trust and the trading company) 
  • Memorandum of Association
  • Articles of Association
  • Companies House forms 
  • loan agreement 
  • subscription letter 
  • service agreement.
Finally, we would also incorporate your trading company at Companies House.

Our team

Our dedicated team has extensive experience of advising all types of academies on a wide range of governance issues, including setting up trading companies and using companies as a model of partnership working for academies and schools.