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More on dissolving chartered corporations

February 7, 2012

UCU policy people have alerted me to this document available from the Cabinet Office on dissolving public bodies.  It contains a section on how to ‘surrender Royal Charters’.

3.1 A Charter can be revoked by an Act of Parliament or by the Sovereign. Technically, a Charter can also become forfeit through action in the Courts alleging impropriety, but this has not been used in modern times. In practice, a chartered body is normally dissolved through voluntary action culminating in a Petition for Surrender. This is done by the body petitioning The Queen in Council to accept the surrender of its Charter. The Petition is accompanied by an appropriate Deed of Surrender together with the original Charter bearing he Great Seal (and any Supplemental Charters). All these documents should be sent to the Privy Council Office. Acceptance of the surrender is signified by an Order in Council, which usually recites the terms of the Deed of Surrender. The chartered body ceases to exist from the date on which such an Order in  Council is made.

This suggests that College of Law could faciliate an outright sale by first approaching the Queen directly to surrender its Royal Charter.  This would be an alternative to the private Act of Parliament discussed in an earlier post.

What this document reinforces is the point that chartered corporations are in a different position to universities that have other corporate forms, such as ‘company limited by guarantee’ or ‘higher education corporation’.  Those last two forms could become subisidiaries of for-profit companies.  Chartered corporations would appear to have to dissolve themselves in entirety prior to a sale of assets etc.

The difference between the private College of Law and other universities can be seen in Section 11. 

As a matter of general policy, when a non-Exchequer body disposes of assets (either tangible or intangible) which were wholly or partly funded by grants or grants-in-aid, the proceeds or an appropriate portion of them should be paid to the Exchequer.

College of Law does not have such assets.  “Public” universities do but the matter would be resolved with a financial transaction.  Paragraphs 4.35 & 4.36 of the 2011 White Paper should be read in this context: the ‘wider public interest’ is simply a fair price.


  1. But it still seems to me that if the chartered corporation is dissolved, the DAPs will go too. DAPs are not an asset that can be sold off before the Corporation dissolves itself.

    I can only see this working if there continues to be a linked charity/corporation and profit-making firm, as at the Centre for Alternative Technology, for instance

  2. Andrew, I agree with your second point. My main point in the last two posts on this is that chartered corporations cannot enter into such structures. Therefore we need to see some process of primary legislation (or its equivalent in the case of Privy Council ‘Orders in Council’) to reform College of Law first.

    As to the first, isn’t this within the fiat of the Privy Council. Here is Andrew Malin from Hefce’s comment in response to earlier Eversheds’s statements about sales:

    “The assets of a charity are not just physical, but include intangible assets such as brand, reputation and potential – the charity’s ‘goodwill’. To maximise the value of any assets sold, trustees are obliged to take independent professional advice. Goodwill is not easy to value, but the terms of sale may need to include ‘overage’ provisions to secure for the charity a stake in foreseeable, but hard-to-quantify, increases in value.

    “To reduce the risk of selling at an undervalue, HEIs’ trustees will need to consider such things as the value (and the potential for increase in the value) of degree awarding powers, of university or university college title, and the development value of land.”

    DAPs are there in the second paragraph…

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