Duties of Directors of Management Companies

Duties of Directors of Management Companies

8:51 AM, 25th July 2019, About 4 years ago 3

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I am a new Director of a Property Management Company (PMC) which has been set up as a Private Ltd Co to manage a block of flats with 90 units. We have been told that all meetings of Directors are informal, no minutes are needed, no voting needs to take place on decisions taken.

Meetings are a free for all basically with one person issuing the instructions to the management company, despite there being 6 Directors.

This does not seem to accord with the 2006 Companies Act regarding private Ltd Co’s. Can anyone confirm if this way of running things is correct.

Many thanks


Editors Notes:

From .Gov >> https://www.gov.uk/set-up-property-management-company

“Set up and run a flat management company

You can set up a limited company – sometimes called a Right to Manage or flat management company – so residents can jointly run a property, eg a block of flats.

Property management law is different in Scotland – see the Scottish government’s guidance on property factors.

Set up the limited company

You must follow the normal process for setting up a private limited company.

The Leasehold Advisory Service has detailed advice on setting up a company to manage property, including dealing with the landlord.

Running the limited company

All the residents who have agreed to be directors will have legal responsibilities.

You must also send Companies House:

Tax for the limited company

You must send a Company Tax Return to HM Revenue & Customs (HMRC) no later than 12 months after the end of the company’s first financial year.

After you do this, HMRC may decide to treat your company as ‘dormant’ – this means that they wouldn’t expect your company to send Company Tax Returns for later years.

Directors’ responsibilities

As a director of a limited company, you must:

You can hire other people to manage some of these things day-to-day (for example, an accountant) but you’re still legally responsible for your company’s records, accounts and performance.”


Neil Patterson

8:53 AM, 25th July 2019, About 4 years ago

Dear Claire,

I have added HMRC notes and links above to assist and other readers will hopefully have their own experiences 🙂

Dylan Morris

11:24 AM, 25th July 2019, About 4 years ago

You need to comply with the various Companies Acts so minutes of Directors meetings need to be kept and decisions made by the majority of directors. A Chairman has to be appointed to run the meeting.
Accounts have to be filed at Companies House you cannot simply declare the Company as dormant. However what is normally filed at is a statement of the Company’s assets and liabilities (a balance sheet) which would usually be zero figures. The service charge accounts run through the company and do not need to be filed.
I am surprised the managing agents have not given you any guidance in this regard. Quite often the managing agents are appointed as Company Secretary to ensure directors meetings are held and run correctly, at least in the early days to hold your hand. Also it’s a good idea to hold an AGM once a year although this is not legally necessary (again somebody needs to draw up the minutes). My advice would be to have a word with your agents and see what help they can give you.

Dylan Morris

11:36 AM, 25th July 2019, About 4 years ago

Also your company will need to register with the ICO as you will need to comply with GDPR legislation. Your company will be the Data Controller and your agent the Data Processor. You will need to regularly produce an audit to show how data is being managed and also need a Privacy Notice which you will need to send to all leaseholders to show them how their data can be used. Again your agent should be able to help as they themselves should be GDPR compliant and aware of the procedures. Well worth joining the RLA as well as they have an extensive section regarding GDPR on their website with a specimen privacy notice you can use.
Running an RMC or RTM company is nowhere as easy as people think. It can be fraught with so many problems. Biggest issue with an RTM is you cannot threaten forfeiture of the lease to recover unpaid service charges as this can only be done by the freeholder. Loads of other problems as well it’s definitely not a bed of roses.

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