Sections 11 and 12 of the Education Act 2002 enable governing bodies of maintained schools to establish companies for specified purposes. The detailed rules in relation to the establishment of such companies are set out in The School Companies Regulations 2002, the School Companies (Private Finance Initiative Companies) Regulations 2002, and in ‘Guidance for School Companies’ published by the Department for Children, Schools and Families.
The constitution of a company is its Memorandum and Articles of Association. The Memorandum of Association sets out the objective of the company and the powers it has to fulfil those objectives. The Articles of Association are the provisions which set out how the company will run on a practical level e.g. the composition of the board, membership and meeting requirements. As part of the process of preparing the constitution, decisions need to be made on what the company intends to do and, in particular, whether profits are to be distributed. Annex A of the DCSF School Company Guidance provide example Articles of Association and Memoranda.