The Leasing and Property Reform Act legislation 2002 (applicable in England and Wales) gives apartment owners the opportunity to manage their own affairs and make their own decisions about the management and maintenance of their apartments, including those insurance, repairs and service charges. through the right to manage (RTM) process.
Starting and running an RTM business raises a number of questions and problems that we address in this article.
Right to manage the business: What is a right to manage the business?
A company formed to take over management through the right to manage (RTM) process, as defined by the Leasing and Common Property Reform Act of 2002, has a number of differences from a normal Limited Company. First of all, it is limited by collateral, not by shares. The owners of the company are members rather than shareholders, and their liability is limited to £ 1. The Right To Manage Company remains a limited partnership registered with Companies House with normal company reporting requirements, although the scope of your actions is limited. The memorandum of association is very specific and is exactly defined by the 2002 Law.
Right to manage the company: how many directors are needed?
Companies House has recently changed the requirements for limited partnerships so that they can now operate with a single director and secretary. However, the RTM memorandum of association requires a minimum of two, unless otherwise determined by an ordinary resolution.
Right to manage the company: how do you sell your apartment?
What happens when someone sells their apartment and a new buyer takes over? A right-to-manage business maintains a membership registry (at the registered office), a membership transfer is simply a case of replacing an owner’s name with the new owner.
Right to manage: what rights does the owner have?
Does the freeholder have the right to become a member of our RTM company? After completes the acquisition of RTM, the free owner has the right to become a member of the RTM company. Most will use this right, not because they want to participate in the day-to-day running of the business, but because they have an ownership interest in the building. Also, you will probably have your business meetings in your own building, which would normally be inconvenient for the owner to attend. Generally, the free owner is assigned one vote if he does not own any floors in the building, or one vote for each floor he owns. The situation is more complicated if there are intermediate owners, but you, as owners, will still be able to outvote any representation of free owners.
Right to manage the company: What are the current obligations?
In exchange for your limited liability (£ 1), limited partnerships are required by law to make certain information publicly available at Companies House. This includes an annual report and accounts, an annual statement and other notifications (such as change of address, change of registered office). These must be on file at Companies House.
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