Jurisdiction(s):
United Kingdom

Local authority companies: establishment, governance, director types and duties under the Companies Act 2006

Published by a LexisNexis Local Government expert

Practice notes

This Practice Note offers practical guidance on the establishment and use of companies by local authorities (LAs). It outlines the governance framework of companies and the categories of company directors.

Governance structure of companies

The majority of companies are incorporated by registration under the Companies Act 2006 (CA 2006) or earlier Acts. Some companies and corporations are created by private Acts of Parliament (for example, certain port authorities and older railway and canal companies), under Royal Charters (such as older universities) or under other legislation; those bodies have distinct governance arrangements that fall outside the scope of this Practice Note. See Practice Note: Royal Charters.

In summary, the governance of companies registered under CA 2006 is divided as follows:

Day-to-day management of the company is entrusted to the board of directors (acting collectively), which may in turn delegate the company’s lawful powers, as well as duties, to individual directors or employees
The shareholders of the company retain several important residual powers...

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Clare Hardy

Geldards LLP

Clare Hardy has a wide range of experience of advising public bodies on a range of issues. She was seconded to Lancashire County Council as a trainee and to Tameside Metropolitan Borough Council as a qualified solicitor. Matters on which she advise include powers, governance, constitutional issues, disclosure of information, standards of conduct, statutory interpretation, public procurement, subsidy control, contracts, school reorganisation, and disposal of land. She has provided monitoring officer support to a national park authority....

Web page updated on 21/05/2026

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