OPERATIONAL GUIDANCE

LOCAL AUTHORITIES AND TRUSTEES

THE LOCAL AUTHORITIES (COMPANIES) ORDER 1995

OG 56 D1-26 July 2000

Purpose: This guidance provides a summary of how this Order affects charitable companies closely affected with local authorities

Divisional responsibility

For action:

Charity Support Division
Registration Division

For information:

Investigation Division

The Local Authorities (Companies) Order 1995 imposes additional regulatory requirements on charitable companies which are closely connected with local authorities. Basically certain controls which apply to local authorities themselves are extended to the companies. The nature of these controls depends on the closeness of the connection between the company and the authority but may include:

• expenditure controls

• a requirement that the Audit Commission should approve the company’s auditor;

• a right of public inspection of the minutes of meetings;

• additional information provision duties;

• a requirement to identify the local authority connection in public documents; and

governance restrictions reflecting those which apply to authorities themselves for example:

• limits on director remuneration;

• non-participation of disqualified councillors; and

• no party political activity.

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