Share of Freehold company in a real mess?

I suggest you begin by determining how many leaseholders are in agreement with you. Once aligned, you can coordinate action on their behalf and compile a combined list of grievances, all backed by solid documentation.

Keep in mind that the AGM requires a minimum of 14 days’ notice (or longer, if specified in the Articles of Association). In theory, if you have enough leaseholders present at the AGM, you can outvote the current board. If they refuse to cooperate, you can then threaten to escalate these grievances to a First-tier Tribunal.

I would also strongly recommend speaking to a solicitor; it’s worth checking if you—or any of the other leaseholders—have home insurance that includes free legal advice.

Alex

I take it that property ownership is each Leaseholder has a share in freehold interest held in the Management co a Residents Management Co. (RMC) a maintenance trust with the sole objective to maintain and repair the property (common areas ) and (the block) incorporated as Dormant.

The LH is the Lessee under the terms of their Lease and the RMC is the Lessor aka Landlord and service charge contributions for costs listed in the leases to be paid to the RMC and is not RMC money must be held in section 42 landlord & tenant act trust account (confirmed in writing by the bank).

The ownership of flats are held in trust for each other and the rules of the trust are attached to the leasehold as a deed/declaration of trust legally binding on each leaseholder.

The LH also has a separate role as shareholder is legally bound by the M&A

Your individual lease ,the titles registered at HMLR , the prime legal document.

You need urgent legal advice from lawyers specifically and competent in dealing with leasehold land held in trust and company law.

First off find the lawyer then call the AGM to put a resolution to shareholders (who own the RMC) the issues which must be addressed to avoid company strike off when the leases to flats can’t be assigned/sold

An AGM is something that legally has to happen annually. An EGM (Emergency General Meeting) is what needs to be called but must follow legislative procedures (Companies Act) including the time frame. All in the Companies Act.

ALL shareholders ie Leaseholders have a legal right to speak but for voting may be restricted to one vote per leasehold not per person.

A majority of the right to vote shareholders can remove Directors AND any managing agent. BUT you need to have a plan ie who will take over even in the interim to manage the Company.

Appointing new Directors also needs to follow procedures and a Chairman is appointed by the Shareholders, not by a single director.

When incorporated the standard M & A of A can be used, and are usually used. The A of A can be amended. The M cannot be once the company is incorporated.

I suggest that the Companies Act is read, it’s actually not difficult to understand surprisingly, line by line. There are responsibilities for Directors, Company Secretary who doesn’t have to be a director, and also for shareholders.

Companies House are very helpful and have videos you can watch re the above responsibilities etc. give them a ring.

To find a solicitor, try putting “company law advice resident freehold companies uk” into your internet browser.

What you describe is highly concerning and potentially unlawful on several fronts. The issues fall into three categories:
Company law breaches under the Companies Act 2006
Breach of statutory and fiduciary duties by the remaining director
A managing agent acting without authority, contract, insurance, oversight, or accountability
Below is a clear explanation of your rights and the steps you can take immediately.
1. DIRECTORS’ FIDUCIARY DUTIES ARE BEING BREACHED
Under the Companies Act 2006, directors must:
• act in the best interests of the company (s.172),
• exercise independent judgment (s.173),
• exercise reasonable care, skill, and diligence (s.174),
• avoid conflicts of interest (s.175),
• not accept benefits from third parties (s.176), and
• declare interests (s.177).
Based on your description, the remaining director appears to be:
• acting to entrench himself rather than promote the success of the company,
• colluding with an unregulated managing agent,
• refusing transparency regarding major company funds (£200,000+),
• obstructing proper decision-making processes,
• refusing shareholder access to information,
• failing to manage the agent, and
• calling a meeting designed solely to appoint an ally and seize control.
This behaviour is almost certainly a breach of sections 171–177 CA 2006, and exposes the director to personal liability.
2. SHAREHOLDERS HAVE A STATUTORY RIGHT TO CALL A MEETING
Regardless of what the remaining director wants, shareholders holding 5% or more of the voting rights may formally require the company to call a general meeting.
This is a statutory right under sections 303–305 Companies Act 2006.
Procedure:
Members holding at least 5% sign a formal s303 request requiring a general meeting.
The director must call the meeting within 21 days.
If he refuses or does nothing, the shareholders may call the meeting themselves under s.305, and the company must pay the costs.
This immediately deprives him of control.
At that shareholder-called meeting, you may:
• appoint new directors,
• remove the existing director (ordinary resolution),
• pass a resolution to terminate the managing agent,
• appoint a new managing agent,
• require full accounting transparency.
This mechanism is independent of the articles — it is statutory, mandatory, and overrides anything missing from or unclear in your Articles of Association.
3. MEMBERS HAVE A STATUTORY RIGHT TO INSPECT THE ACCOUNTS
Under s.116 CA 2006, any member may require:
• the register of members,
• the service address of directors,
• the PSC register.
Under s.423 CA 2006, members may apply to court for an order requiring inspection of company accounting records.
Given that:
• the managing agent has sole access to £200,000+
• there is no contract, no insurance, and no oversight
• the director has refused visibility
…this is fertile ground for a s.423 court application compelling disclosure if voluntary compliance is not obtained.
The court is highly likely to grant this, because financial opacity involving company funds is a red flag.
4. THE MANAGING AGENT IS ACTING WITHOUT AUTHORITY
A managing agent with:
• no contract,
• no professional indemnity insurance,
• no company,
• no accreditation,
• no client money protection,
• no oversight,
• sole control of the company’s bank account,
• and a history of false statements,
…is acting ultra vires and without any lawful appointment.
A managing agent must be:
• formally appointed by the board,
• authorised under a written agency agreement,
• compliant with client money regulations,
• appropriately insured.
None of this is present.
The agent’s position is therefore null, and they may be removed by:
• resolution of the board, or
• resolution of the shareholders at a general meeting.
Their access to the bank account may be cut immediately once new directors are appointed.
5. AN AGM WHERE SHAREHOLDERS CANNOT SPEAK IS INVALID
An AGM must:
• permit shareholders to ask questions,
• allow discussion of accounts and management,
• allow resolutions to be proposed and voted on,
• follow the Articles and CA 2006 requirements for notice, participation, and voting.
An AGM with a single agenda item, no right to speak, and designed to install a friend into power is procedurally defective and likely unlawful.
It can be challenged on the basis of:
• unfair prejudice (s.994 CA 2006),
• breach of fiduciary duty,
• procedural irregularity,
• and failure to comply with statutory obligations.
6. YOUR LEGAL OPTIONS — THE PRACTICAL ROADMAP
Here is what you can do immediately:
A. Use Section 303 CA 2006 to force a proper general meeting
You need only 5% of members.
This ends the director’s control.
B. At that meeting:
• Remove the obstructive director
• Elect a full and competent board
• Terminate the managing agent
• Appoint a professional agent
• Require full financial transparency
• Impose dual-authorisation and controls on the bank account
C. If the director obstructs this, apply for a Section 306 court order
The court can convene a meeting on your behalf.
D. Consider a Section 994 unfair prejudice petition
If the director continues to act in a way that:
• excludes members,
• entrenches control,
• mismanages funds,
• or makes decisions for personal motives.
E. Demand immediate accounting transparency
Using:
• s.116
• s.423
• or a Pre-Action Protocol letter threatening court proceedings
7. INSURANCE RISK MUST BE ADDRESSED IMMEDIATELY
Your concern about voided insurance is well-founded.
If:
• the managing agent has no PI,
• governance has collapsed,
• financial controls have failed,
…the insurer may indeed refuse to pay claims.
One of the first acts of a newly elected board should be to instruct:
• an independent audit,
• an insurance review,
• a compliance review of fire / health / safety obligations.
8. CONCLUSION
You are not powerless. Far from it.
The Companies Act 2006 gives members very strong statutory rights specifically to prevent exactly the type of conduct you describe.
You can:
• force a proper meeting,
• replace the director,
• remove the agent,
• take control of the bank account,
• restore governance,
• compel document disclosure,
• and if needed, bring legal action.

Very useful advice.

However speaking as someone with similar experience to this situation, the hardest part is persuading fellow leaseholders.

Ignorance of leasehold and company law is widely and ruthlessly exploited.

When this has been going on for a long time then trying to explain all the above previous very useful posts to fellow leaseholders who have been brainwashed or threatened is nearly impossible.

It ends up with just one or if you’re lucky two others to pursue the matter for the wider benefit with the authority of a professional or undertake the research personally -AI is very useful.

How many queries on Property 118 is answered that they should firstly read their lease the legally binding contract for which they paid the premium.