{
  "url": "https://openlegislation.uk/public-airport-companies-capital-finance-order-1996/article-2",
  "json_url": "https://openlegislation.uk/public-airport-companies-capital-finance-order-1996/article-2.json",
  "legislation": "uksi/1996/604",
  "legislation_title": "Public Airport Companies (Capital Finance) Order 1996",
  "legislation_url": "https://openlegislation.uk/public-airport-companies-capital-finance-order-1996",
  "path": "article/2",
  "kind": "article",
  "number": "2",
  "heading": "Liabilities of controlling authority",
  "text": "(1) Where a public airport company or any subsidiary of such a company—\n(a) incurs additional liabilities; or\n(b) reduces its liabilities;\nthe liabilities are to be treated for the purposes of the application of Part IV of the Act as if they were incurred or reduced, as the case may be, by the controlling authority of that company; and, where they are to be so treated, the provisions of that Part are to apply as described in articles 3 and 4 below.\n(2) For the purposes of paragraph (1) above, a public airport company or any subsidiary of such a company incurs additional liabilities where, upon calculation, the total of its relevant liabilities on the relevant date in a financial year exceeds an amount equal to the total of its relevant liabilities on the relevant date in the immediately preceding financial year.\n(3) For the purposes of paragraph (1) above, a public airport company or any subsidiary of such a company reduces its liabilities where, upon calculation, the total of its relevant liabilities on the relevant date in a financial year is less than an amount equal to the total of its relevant liabilities on the relevant date in the immediately preceding financial year.\n(4) Subject to paragraphs (6) and (7) below, in paragraphs (2) and (3) above, “relevant liabilities”, in relation to a public airport company or any subsidiary of such a company, means the aggregate of—\n(a) the total of the liabilities of the company or subsidiary, other than current liabilities, which are shown in the company’s or subsidiary’s balance sheet or, if there is no balance sheet as at any date in the financial year in question, the total of which is estimated by the controlling authority; and\n(b) the amount, if any, by which the total of the current liabilities of the company or subsidiary exceeds the total of its current assets.\n(5) In this article “liabilities”, in relation to a public airport company or any subsidiary of such a company,—\n(a) subject to sub-paragraph (b) below includes the issued share capital of that company or subsidiary (including any premium obtained by the company or subsidiary upon the issue of such shares) and such liability shall be treated as a liability owed to the person who holds such issued shares,\n(b) does not include any liability owed—\n(i) to the controlling authority,\n(ii) to a constituent council of the controlling authority,\n(iii) to or by that public airport company by or to any subsidiary of that company,\n(iv) to a principal council which, on or after 17th December 1993, transferred or transfers, as the case may be, all of its share in the equity share capital of that public airport company to a relevant person provided that liability was owed before that transfer, or\n(v) to a relevant person by reason of that person holding any share in the equity share capital of that company or subsidiary issued to a relevant person on or after 17th December 1993 or transferred to a relevant person by the controlling authority or a constituent council of that authority on or after that date, and\n(c) does not include any provision for—\n(i) pensions and similar obligations, or\n(ii) taxation.\n(6) Liabilities shown in the company’s or subsidiary’s balance sheet and which comprise current liabilities shall be included in the total of the liabilities of the company or subsidiary for the purpose of paragraph (4)(a) above and excluded from the total of current liabilities of that company or subsidiary for the purpose of paragraph (4)(b) above to the extent that they include any current liability which, in accordance with a determination of the controlling authority referring to that liability and made no later than 30th September in the following financial year, is not to be set against the current assets of the company or subsidiary.\n(7) Liabilities shown in the company’s or subsidiary’s balance sheet and which comprise current liabilities shal be included in the total of the liabilities of the company or subsidiary for the purpose of paragraph (4)(a) above and excluded from the total of current liabilities of that company or subsidiary for the purposes of paragraph (4)(b) above where they were shown as liabilities of that company or subsidiary in the balance sheet for the preceding financial year but did not then comprise current liabilities.",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/uksi/1996/604/article/2",
    "retrieved_at": "2026-10-29T12:49:46.258623+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}