Ufl Ltd is a private company limited by guarantee established by the Secretary of State in October 1998. The company is seeking charitable status. By making use of information and communications technologies it will encourage innovative and cost-effective ways to learn.
The department exercises a number of controls over Ufl Ltd. The company's memorandum and articles of association were approved by the Secretary of State. The Secretary of State also has the right to appoint the chairman and between 30 and 49 per cent of the board directors/members of the company and to approve the appointment of the chief executive.
The funding agreement between the Secretary of State and Ufl Ltd provides for a number of checks and controls on the spending of public funds. It specifies that a financial plan which sets out the company's financial proposals and reflects the guidance the Secretary of State may give Ufl Ltd shall be submitted to the Secretary of State annually. The financial plan must take into account guidance issued by the Secretary of State annually. The financial plan must be approved by the Secretary of State and it is subsequently monitored by the department. The financial plan relates Ufl Ltd's costs to its activities in the year covered by the plan. The funding agreement and the financial plan provide the basis for financial support.
In recognition of the market in which Ufl Ltd will operate, the company will own the assets it creates (mainly intellectual property rights on learning products) and retain any receipts from the disposal of assets. The department will take account of any income received by the company as a result of government investment, including asset disposal proceeds, in fixing the level of future financial support. This regime will apply only so long as the company receives government support; any such income received by the company after it has achieved financial independence will be treated as its own.
The funding agreement also provides for Ufl Ltd's intellectual property rights to be assigned to the Secretary of State if the funding agreement is terminated due to Ufl Ltd's breach of contract or insolvency. The memorandum of the company provides that if the company is wound up or dissolved the Secretary of State has a right of veto over the disposition of any remaining assets.