# Local Audit and Accountability Act 2014, Paragraph 2: Qualified control requirement for firms


(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.

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Source: https://www.legislation.gov.uk/ukpga/2014/2/schedule/1D/paragraph/2 (the official version)
Page: https://openlegislation.uk/local-audit-and-accountability-act-2014/schedule-1D/paragraph-2
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.