Paragraph 2 Qualified control requirement for firmsF1

(1)

This paragraph applies for the purposes of paragraphs 4(1)(b) and 6(2)(a) of Schedule 1C.

(2)

A firm meets the qualified control requirement if—

(a)

a majority of the members of the firm are qualified persons, and

(b)

where the firm’s affairs are managed by a board of directors, committee or other management body—

(i)

a majority of that body are qualified persons, or

(ii)

if the body consists of two persons only, at least one of them is a qualified person.

(3)

The following provisions apply for the purposes of sub-paragraph (2).

(4)

An individual is a qualified person if the individual—

(a)

holds an appropriate qualification, or

(b)

falls within paragraph 4 or 5 of this Schedule.

(5)

A firm is a qualified person if the firm—

(a)

meets the criteria to become a registered local audit provider, or

(b)

is eligible for appointment as a statutory auditor under Part 42 of the Companies Act 2006.

(6)

A majority of the members of a firm means—

(a)

where under the firm’s constitution matters are decided upon by the exercise of voting rights, members holding a majority of the rights to vote on all, or substantially all, matters;

(b)

in any other case, members having such rights under the constitution of the firm as enable them to direct its overall policy or alter its constitution.

(7)

A majority of the members of the management body of a firm means—

(a)

where matters are decided at meetings of the management body by the exercise of voting rights, members holding a majority of the rights to vote on all, or substantially all, matters at such meetings;

(b)

in any other case, members having such rights under the constitution of the firm as enable them to direct its overall policy or alter its constitution.

(8)

Paragraphs 5 to 11 of Schedule 7 to the Companies Act 2006 (rights to be taken into account and attribution of rights) apply for the purposes of sub-paragraphs (6) and (7) as they apply for the purposes of section 1162 of that Act.

Annotations

Textual amendments

F1: Schs. 1B-1D inserted (29.4.2026 for specified purposes) by English Devolution and Community Empowerment Act 2026 (c. 23), s. 108(1)(6), Sch. 35