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In 2016, the
Local Government Act 1995 was amended to allow two or more local governments to establish a statutory corporation known as a regional subsidiary.
formation of a regional subsidiary is an exception to the general rule
that local governments cannot acquire or form a corporation.
a regional subsidiary can only be formed for non-commercial goals, such
as providing services to the community or increasing the efficiency of
existing local government operations.
regional subsidiary is designed to be a convenient way for local
governments to pool their resources and cooperate more closely with
In addition to increasing the efficiency
of existing services, a regional subsidiary may increase the viability
of new services which local governments want to provide. It may also
form a mechanism for groups of local governments to come together to
deal with region-specific issues.
A regional subsidiary is:
regional subsidiary is predominantly governed by its charter, which can
be individually tailored to suit the subsidiary's activities and role
in the community.
Examples of what a regional subsidiary can potentially be formed to carry out include:
The process for establishing a regional subsidiary is set out in the Local Government (Regional Subsidiary) Regulations 2017.
This process involves:
Once the minister's approval is obtained, the subsidiary will exist as a legal entity from the day specified in the approval.
More information on establishing a regional subsidiary can be found in the documents below.
Once a subsidiary is established, it will continue to operate as a separate legal entity until:
actual lifespan of a subsidiary will be specified in the subsidiary's
charter, which in turn will depend on the role that the subsidiary is
intended to perform.
For example, the
charter may provide that the subsidiary exists for as long as the
member councils wish it to. Alternatively, the charter may specify that
the subsidiary is to be wound up after a specified amount of time, or
after achieving a specific objective.
Creating a subsidiary is a complex matter, since each subsidiary
will be formed in unique circumstances and every charter will be
reason, it is advisable to contact the department prior to preparing any business plans or charter documents, so that
appropriate support and advice can be provided at every step of the process.
approval of a proposal is never guaranteed, the department is committed
to ensuring that viable proposals are given a chance to deliver positive
outcomes for local communities.
Do not submit enquiries with this form.