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  • £149.89
    No annual charges
    This package is for customers who want the simplest flats management company incorporation with bank account at Barclays or HSBC (optional), all corporate documents produced electronically.
    The following documents will be e-mailed to you upon the registration of flat management company limited by guarantee:
    • The certificate of incorporation;
    • The memorandum & articles of association;
    • The fast-track bank account with HSBC or Barclays.
  • £164.89
    No annual charges
    This is the basic flat management company limited by guarantee formation with HSBC or Barclays bank account (optional) package with additional documents produced electronically & the laminated certificate will be send by post.
    This flats management company registration offer includes all services mentioned in the first option, plus:
    • The meeting of the board of directors;
    • Membership certificates;
    • The company' register;
    • The laminated certificate of incorporation.
  • £207.89
    No annual charges
    This is one of our very favourite property management company registration packages, which comes with the Barclays or HSBC bank account (optional).
    The third option includes all benefits & items mentioned in the second option, plus free delivery of:
    • One set of the memorandum and articles of association with a company's registers printed & top-notch bound;
    • The first meeting of the board of directors, elegant printed membership' certificates & the rubber stamp;
    • The certificate of the beneficial owner.
  • £214.89
    Annual fees from £75.00
    This is the MOST POPULAR property management company set-up packages which comes with the registered office address in London, at Baker Street.
    This company formation offer includes all company registration benefits & items mentioned into the SECOND OPTION, plus the provision of:
    • The registered office address in London;
    • The government mail forwarding;
    • The secretarial compliance service & the certificate of the registered office address;
    • Additional services are available.
  • £149.89
    No annual charges
    This flat management company limited by shares formation package is for customers, who have an address in the UK, & want the simplest offer with documents produced electronically.
    The following documents will be sending via e-mail upon the registration of property management company:
    • The certificate of incorporation;
    • The memorandum & articles of association;
    • The fast track corporate bank account with HSBC or Barclays (which is optional).
  • £164.89
    No annual charges
    This is the basic flats or property management company formation package for such customers, who have a valid address in the UK, with additional documents produced electronically & the laminated certificate will be send by post.
    This company establishment offer includes all services mentioned in the first option, plus:
    • The meeting of the board of directors;
    • Share certificates;
    • The company' register;
    • The laminated certificate of incorporation (free delivery).
  • £207.89
    No annual charges
    This is one of our very favourite UK property management companies' registration packages, which comes with the Barclays or HSBC bank account (optional).
    The third incorporation option includes all benefits & items mentioned in the second option, plus free delivery of:
    • One set of the memorandum and articles of association with a company's registers printed & top-notch bound;
    • The first meeting of the board of directors, elegant printed shares' certificates & the rubber stamp;
    • The certificate of the beneficial owner.
  • £214.89
    Annual fees from £75.00
    This is the MOST POPULAR property management company set-up packages for British customers & expatriates who are looking to get a registered address alongside with the UK properties management company start-up.
    This company setting-up offer includes all LTD registration benefits & items mentioned into the SECOND OPTION, plus the provision of:
    • The registered office address in London;
    • The government mail forwarding;
    • The secretarial compliance service & the certificate of the registered office address.

   Registration of Flats or Property Management Company Limited by Shares or by Guarantee

Are You Ready to Register Flats or Property Management Company in the United Kingdom?


We offer fixed fee for the UK limited company formation with annual account & annual return preparation & filing with government authorities.
The description of our UK company start-up offer:
  • The private company registration within a few hours;
  • The provision of a registered address for one year, & bank account;
  • The preparation & filing of annual account & return.
Our UK company starting-up package is ideal for clients, who need a monthly bookkeeping, the preparation of annual account & its submission with Companies House & HMRC.
Our company formation with bookkeeping services includes:
  • The UK company formation;
  • The registered office address;
  • Display of a company name;
  • The nominee secretary;
  • The business bank account;
  • The provision of HMRC tax agent;
  • Monthly bookkeeping service;
  • The PAYE scheme registration;
  • The preparation & filing the annual return & annual account.
ALL-INCLUSIVE

This UK company formation offer is ideal for such clients, who need to appoint us to deal with the bookkeeping & VAT returns during the financial year.

The registration of a company & and the provision of a legal service address in London.

The provision of a nominee secretary & opening a UK bank account.

Company formation with VAT registration & the provision of the VAT tax agent.

The keeping of the VAT & bookkeeping records & timely VAT submission with the CH and HMRC.

Starting a Small BusinessAre you looking for a quality information & practical guidance how to register & start your own flats or properties management business in the United Kingdom, how to register your new block of flats private company limited by guarantee or limited by shares, how-to setting-up and running your property management business; how to select the best type of a business registration form to manage block of flats, how to incorporate a private flat management company limited by guarantee & need a small properties management business start-up advice?

Do you need a UK business company formation agent, with the prompt service and an expert advice from the well-qualified professionals whose complementary skills and long experience enable them to deliver the quality service to the UK and international customers on the areas of a new flats management company formations, auditing, bookkeeping, accounting, taxation, corporate management consulting, business maintenance services, trusts' administration, or offshore businesses incorporation service, liquidation, insolvency and limited companies recovery?

Are you looking to register a small business in England, Scotland, Wales or Ireland? Do you want to register a limited company for the properties management needs in Belfast, Dublin, Edinburgh, London, Manchester, or Sussex? Do you have an idea for starting a new property management business in the Great Britain, and want to register a limited liability company for the management needs, or to create a new firm now?

On our web-site, you can get all information on choosing and registering the right legal structure for your properties management business, legal tips on day-to-day business operations, & an overview of the employment law issues, and much more.

If you have an idea for starting a flat management business in the UK, forming of a private LTD company online, becoming or registering as a private company limited by guarantee - we can assist you and provide the higher standard of support for starting-up a flat management business & registering a company online directly from the ground up. The better the company's structure is prepared upon registration, the better results can be achieved on the later stage.

It is our job to assist in evaluating the options available at the beginning. In addition, we offer services regarding the formation of flats management business entities in the UK, EU, and offshore (companies and partnerships) - register your manage of properties company with us, and enjoy the full support of the excellent & fully trained team of Coddan.

During our organisation's experience, Coddan has rapidly expanded its portfolio of offshore international and local companies creation, - this is the result of the quality service we offer & the trust our customers place on us. We are dedicated to deliver quality and professional companies incorporation services to our clients worldwide, to enable them to run their businesses more cost-effectively and efficiently.

Residents' management companies are also known:

  • Block management companies;
  • Flat management companies;
  • Residents associations;
  • The management company.

In law, a limited company is a 'person' in its own right. This means it can own property (such as a freehold or leasehold) and enter into contracts in its own name. It exists independently and separately from the people who manage or own it. When a property is divided into a number of flats, each flat owner usually has a lease of their own flat, but they may also be a member of a management company that owns the freehold (or lease) of the entire building.

As members of the company, the flat owners have their say in running it. If the members own shares in the company, it is common practice in the company's constitution (its articles of association) that members who sell their flats must also transfer their membership to the new owners. This ensures that, at any given time, the company limited by guarantee represents the interests of all the current flat owners, and it remains a separate legal entity regardless of who holds its membership.

If your entity is a company limited by guarantee, it means that the members have agreed to contribute to the assets of the company if it is wound up.

The Minimum Requirements for the Registration of a Flat Management Company Limited by Shares



  • A private company must have at least one director, one shareholder (or the member), and may have a secretary.
  • You need at least one person to form this type of the company. If there is only one director, and that director is a natural person in your company, that director can also act as the secretary and/or shareholder (member).
  • A company must have at least one director who is a natural person. This requirement is met if the office of the director is held by a natural person as a corporation sole or otherwise by virtue of an office.
  • You can register a sole director' company, if you are familiar with the secretaries duties and responsibilities, because all of them belongs to a sole director.
  • The Companies Act imposes no restriction on the minimum age of company directors. However Companies House will actively discourage the appointment of anyone under the age of 16 from taking up a company directorship on the grounds that the individuals concerned may not fully understand the legal liabilities that go with the position and for the most part will not have the experience necessary to perform the duties of a company director.
  • Under the Companies Act 2006, there is no restriction on any or all of the members/shareholders being from an overseas country (i.e. outside the United Kingdom in terms of residency, domicile, citizenship, place of incorporation or all or any of those concepts).
  • There is no requirement for the officers of your company to be UK citizens or residents, nor for them to hold valid work permits.
  • Owning, or being an officer of a UK company does not, however, grant you any right to live or work in the UK if you are a foreign national.
  • Your flats management company must have a registered office address within England or Wales or Scotland; this is the official address of your company and will be on the public record as such.
  • Your flats management company must hold its official company documents at its registered office address: its register of shareholders (or members), and its constitutional documents.
  • So long as you maintain a registered office address in England or Wales, or Scotland, you can conduct your business from any place in the world: you do not have to run your business from the registered office address.

Starting a Small Flats Management Business: What We can Do for You – Flats Management Company Formations Agent vs. Companies House

 

Flats Management Company Formation Coddan is the UK companies' (limited by shares or limited by guarantee) formation agent, certified accountants and business consultants' firm with many years of experience in assisting clients with business incorporation needs in the United Kingdom (England, Wales, Scotland and Northern Ireland), as well as with the set-up and formation of the offshore tax-free companies, offering in most circumstances the same-day online flats management companies registration services for the UK residents & as well as for non-UK based customers. Our expert knowledge and extensive experience of setting-up of property management businesses and management companies' structures has made us possible to provide the very professional, prompt, and the most efficient flats management companies' incorporation level of services.

Our team of tax-advisors and incorporation consultants will be pleased to assist with your enquiries related to establishing & maintaining the limited liability flats management companies or creating the more complex corporate legal & the tax-savings structures. On our web-site, you will find the number of useful tips and legal information, downloadable documents, which may help you to learn what to take into the consideration when deciding among the companies limited by shares registration, private limited companies by guarantee formation, setting-up of the properties management entities, registering as the single or blocks' of flats management companies, establishing of other business structures. Our great value the UK FMC company formation price starts from just £149.89, we consistently provide the quality business registration assistance & the best incorporation service to satisfy our valued customers - you will receive the personalised telephone & e-mail help that you really need!

Coddan' flats management companies formation phone lines provide the confidential incorporation advice, business creation support, and the access to the pastoral care for business consultants & London based certified accountants. Some of our help lines can also be contacted via the phone, or via the online help advisors, or even by an e-mail and by fax. Our team of friendly flats management companies formation staff (who are all convincing specialists) is on hand to ensure that your move goes through as smoothly and swiftly as it possible.

Useful Tips:


There is no requirement for the officers of your company to be the UK citizens or residents, or for them to hold the valid work permits. Owning, or being an officer of the UK company does not, however, grant you any right to live or work in the UK if you are a foreign national. A limited company must have at least one director, one shareholder (member), and may have a secretary.
Confidential flats management business companies formation advice & support services have been provided from our premises at 124 Baker Street, in London. We are committed to providing the comprehensive range of the properties management incorporation services and ensure that we offer the legal registration services that blend professionalism with the friendly, and informal approach. By doing so, we remove the mystique that sometimes surrounds our profession, we believe that each client has an individual and specific legal requirements and therefore provide a prompt & professional incorporation service, which is individually tailored to the particular needs of each of our customer. By doing so, we are able to advice & assist in the clear, direct, and the cost effective business registration manner.
Register a Flat(s) Management Company Online: Why You Need to Have a Property(ies) Company' Formation Agent
 

Our business is international - we offer a wide range of legal incorporation services to multinational, public & private clients and entrepreneurs in different business industries. Our firm deals with transactions of all sizes and complexity combining global and local expertise on behalf of clients in the UK, including the Northern Ireland, Republic of Ireland, and the Isle of Man, & around the world. In addition, we also advise foreign customers on starting and doing business in England, Wales, Scotland, Northern Ireland, Republic of Ireland, and the Isle of Man & in other offshore countries. We can provide you with a wide range of company-related legal advice covering all aspects of the start-up, trading activities and business expansion in the UK and overseas as well as realising value.

If you prefer to order flats management company registration by phone or via e-mail, or if you would like to place an order at our office, for an initial discussion, with no obligation please call us at +44 (0) 207.935.5171, or 0330.808.0089 and benefit from our personal guidance in registering the company limited by guarantee or limited by shares. We are looking forward to serving your business needs.

Incorporate a FMC Company Online: What Does a Flat Management Company Do?


Flat management companies typically manage common parts of the building. They may have other responsibilities. Your property probably has parts common to all the flat owners living in it: boundaries, roofs, halls, drives and gardens being typical examples. These require maintenance, insurance, lighting, etc. The individual flat owners usually fund these costs, by making periodic contributions into a pooled fund.

Many flat management companies choose to account for these transactions within the company. If your company just pays a few bills, perhaps for repair or maintenance, then your advisor may say that these payments need not go through the company's books. Less formal arrangements, such as collecting the money through a residents association, may be satisfactory.

The company could then continue to own the freehold (or head lease) of the property, but it would conduct all accounting transactions elsewhere - the company would then be 'dormant'. You would still have to prepare accounts, present them to members, and submit them to Companies House and HMRC, but all that would mean is a simple balance sheet that does not have to be audited. You should seek professional advice before adopting this approach to ensure that you are complying with the legal requirements.

Important Note:


Residents often use a limited company for collecting a central pool of cash for carrying out repairs and maintenance to common parts of the property. If a limited company used in the management of a block of flats, it is often a condition of buying a flat that the buyer becomes a member or shareholder of the company. Call us to discuss your needs and see how we can help.
A standard dormant company balance sheet, Form DCA, is suitable for companies limited by shares that have been dormant since incorporation, which can be filed online.

Who is Responsible for the Liabilities of Limited Companies?


A primary benefit of limited companies is that the owner's liability is limited if the company fails (unless its owners choose to have unlimited liability): unlimited liability is not covered here). Limited liability means that the owners will only pay what they have already paid or agreed to pay towards settling the limited company's debts - either what they have paid or agreed to pay for their shares or the amount which they have guaranteed to pay, usually £1.00. In exchange for this limited liability, the law requires limited companies to make certain information available to the public. Onother popular option for flats management companies registration is a company limited by guarantee.

They file this information at Companies House. The timing and presentation of the information is governed by law. Company law governs flat management companies. This does not allow flat management companies to be treated any differently to other companies. The main legislative requirements to file information at Companies House affecting flat management companies are that they deliver: -

  • An annual report and accounts;
  • An annual return; and
  • Other notifications (typically changes in directorships).

These documents and notifications must be filed at Companies House.

Register Flats Management Entity: Who is Responsible for the Managing of the Company?


Register Flats Management Company Managing a company is the responsibility of its officers. The officers are the company's directors and the company secretary. All companies must have directors. From 6th April 2008, a private company does not have to have a company secretary: but it can choose to include in its articles of association a requirement to have one. If you appoint a company secretary, you must notify Companies House of the appointment, any change of details or the termination of the appointment on the appropriate form e.g.

Public companies must have at least one qualified company secretary. You use the same forms outlined above to notify Companies House of the appointment, change of details or termination.

The directors and secretary manage the company on behalf of the members. Among other things, they are responsible for holding meetings and ensuring that all the necessary returns, accounts and other documents reach Companies House by the due date.

Duties and points to consider concerning the management of such companies include: -

  • Directors - the main duties are fiduciary relationships, ensuring there is no secret profit, and acting in the interests of the company;
  • Controlling agents (i.e. ensuring the actions of the accountant and manager are actively reviewed);
  • Meetings - the conduct of meetings must be legal, fair and effective;
  • Accounts - accounts must be published annually and must show in sufficient detail income/expenditure, assets and liabilities. Failure to do so can result in penalties for the company and possibly the directors too;
  • Authorities - these will set out what the company is entitled to do, which will reflect the terms of the leases;
  • Conflicts - unlike most companies, with flat companies it is often a requirement that directors can only be shareholders and/or members must be lessees or their assignees.

Important Note:


A residents management company (RMC) protects the interests of the leaseholders. RMC’s typically manage common parts of the building although they may have other responsibilities. Your property probably has parts common to all the flat owners living in it: boundaries, roofs, halls, drives and gardens being typical examples. These all require maintenance, insurance, lighting, etc. Call us to discuss your needs and see how we can help.
All these controls need to be clearly understood by the directors.

Block Management Companies, Flat Management Companies, Residents Associations and a Secretary


The main functions of the secretary are: -

  • Ensuring that the organisation complies with all relevant rules and regulations including any relating to the ownership records;
  • Setting the structure, agenda, conduct and relevant papers both for board and lessee meetings;
  • Acting as the focal point for owners and prospective owners and their agents, for example with regard to the sale and purchase of flats; and
  • Acting as a sounding board for directors and lessees.

The secretary will often be responsible for maintaining membership records and other statutory books, minutes of meetings, accounting records, budget creation (long and short term), service charge billing. In addition the secretary will generally deal with changes in ownership, and any insurance administration or insurance claims. One of the most important duties the secretary undertakes is the organisation and recording of company meetings - an anomaly to the normal rules as all directors must be a member and flat owner (there must be a potential conflict of interest to be a director). A good agenda and good paper design, coupled with effective chairmanship, will improve the outcome of the decision-making process.

Do the Members Get a Say in How to Manage the Company?


How to Manage the Company? From 1 October 2007 private companies have not generally had to hold general meetings. However, if there is a requirement in an existing private company's memorandum or articles of association on 30 September 2007 that expressly required the company to hold an annual general meeting, this requirement still has legal effect after 1 October 2007. In addition, the company will still need to hold general meetings to dismiss a director before the expiration of his office, or remove an auditor before the end of his term of office. Private companies can make most decisions that were formerly made at meetings by written resolution proposed by members.

There is a power for members to require directors to call a general meeting of a private company. However, this power is only effective if a required percentage of the members request it.

Public companies must hold an annual general meeting (a flat management company can be registered as a public company limited by shares or as a public company limited by guarantee; if you require to be registered as a public company, please contact us for the further details). General meetings are an opportunity for members to raise issues and take decisions regarding the running of a company. The members may elect and remove directors and pass various resolutions. For an example, members may resolve that the company may send or supply documents, including accounts, to members by making them available on a website. Members are not obliged to receive communications in this way and have the right to request a hard copy.

Running a Flat Management Company: What Information Does Companies House Need to Know?


Companies House keeps up-to-date information about all limited companies on record and we make this information available to anyone who wants to know about a company. For example, Companies House need to know: -

  • Where to contact a company. The company's official address is known as its registered office address.
  • Who runs the company? The particulars of a company's officers.
  • Who owns shares in a company? The particulars of the shareholders (if a company has them).
  • Where the company keeps certain company registers.
  • What rules govern a company? Its memorandum and articles of association.
  • What is a company's financial year-end? A company's financial year-end is known as its accounting reference date.
  • What do the company's accounts say?

Important Note:


The RMC residents management company will have a memorandum and articles of association specially drawn up to allow the company to own, manage and administer a leasehold or freehold property, which is normally divided into several dwelling units or flats, with each leaseholder owning a share in the company. The leaseholder will be obliged to transfer the ownership of the share to the new leaseholder when disposing of the property.
Call us to discuss your needs and see how we can help.
Most of this information registered at Companies House when a company is first formed and, if anything changes, you will need to tell us, usually on the appropriate form. Every company must deliver an annual return to Companies House at least once every 12 months, which is a summary of the information held on the public record at Companies House. In addition, every year, a company must prepare financial accounts and send those to Companies House and HMRC.

Statutory Accounts: What Accounting Records Must a Company Keep?


All companies have a duty to keep accounting records, e.g. invoices, credit notes etc. These records form the basis of preparing annual accounts. For financial years starting on or after 6 April 2008, the Companies Act 2006 and Regulations made under it specify the format in which companies must prepare annual accounts, the information that needs to be disclosed, and the rules affecting the valuation and treatment of the transactions and balances appearing in company accounts.

These requirements to produce annual accounts are long and complicated. If you are uncertain how to produce them you may wish to consider consulting a professional accountant to prepare your annual statutory accounts.

What if Our Company Cannot Afford a Professional Accountant?


Professional Accountant Some flat management companies do not want to employ an accountant and try to prepare their accounts themselves. Many of these attempts to produce annual accounts go badly wrong. The accounts are made without reference to, or knowledge of, the legislative requirements; yet the directors sign, for example, a statement in the accounts acknowledging that the accounts comply with the legislative requirements.

Directors should note that they can be prosecuted if their accounts fail to comply with the legislative requirements. Some flat management companies elect one of their members to keep a record of transactions, and also expect the individual to prepare the statutory accounts. However, preparing statutory accounts can be time consuming, stressful and frustrating. All the members should carefully consider whether it is fair to impose that burden, and whether the chosen individual is confident, competent and happy with the responsibility. You may wish to consider instructing a professional accountant to prepare the statutory accounts.

Our Treasurer Does the Book-Keeping and Accounts - What Can We Do to Make Their Job Easier?


Members can make the life of the bookkeeper easier by ensuring that they pay their contributions into the company bank account on time. Being able to write up the accounting records regularly, filing and cross-referencing paperwork, and completing details on cheque stubs will all make the bookkeeping task easier. If you are the treasurer but inexperienced in this role, it is worth remembering that relying on your memory doesn't work very well - you should keep proper written records and update them regularly.

Creation of a Property Management Company: What is a Registered Office Address?


This is a company's official address registered at Companies House. It is also the address to which Companies House and HMRC will send letters and reminders. The registered office can be anywhere in England or Wales (if your company is registered there) or in Scotland (if your company is registered there), or in Wales if your memorandum of association says that the registered office must be there. It is important that you deal with all correspondence and notices Companies House and HMRC send to this address promptly. You must notify a change of registered office address to Companies House & HMRC. The new address only becomes the registered office address when the form has been registered at Companies House. All companies must have a registered office, and display the company's name outside or inside of the premises. Regulations made under the Companies Act 2006 require a company to display its name at its registered office and other places of business, on business documents and on websites. The purpose of the regulations is that the legal identity of every company should be revealed to anyone who have, or may wish to have, dealings with it.

The requirements are included in the Companies (Trading Disclosures) Regulations (Statutory Instrument 2008/495) and the Companies (Trading Disclosures) (Amendment) Regulations 2009 (SI No. 218), please contact us for the further explanations.

Flats Management Entities Incorporation Time: How Long it Takes to Complete the Registration of Flats Management Company
 

It usually takes between three and six working hours from the moment you submit your application until the time you receive your flats management company' official documents. In some instances if you submit your application later than 2:00 p.m., you may receive your incorporation documents in the next working day, depending on how many companies are on the Companies House queue.

If, for whatever reason, you need to register a property management company on the same day and cannot afford to risk the possibility that it will register the following day, you can pay additional fee for the guaranteed same day incorporation. This will guarantee that your company be registered within the same working day, which is beneficial to you - should you need to meet bank appointments or access to your unique company code for a contractual obligation.

The guaranteed same day incorporation feature is available in all the packages on offer at Coddan CPM.

Registering a Flat Management Limited Company Online: Our Properties Management Business Start-Up Services
 

Flats management companies registration documents submitted electronically, which allows us to offer you a timesaving service & eliminate the necessity to complete the paper forms, sign them by your company officers, and certify by a solicitor or notary public.

Our services include assisting you on: -

  • Advising on setting-up of a new flats or property(ies) management business;
  • Flats or property management company formation and registration;
  • Directors and secretaries duties;
  • Properties company administration;
  • Flats company management formation and agreements;
  • Shares or membership issues and further ownership transfers
  • Shares or memberships sales and the further purchases;
  • Shareholders or memberships agreements;
  • Dealing with the Companies House, HMRC and other relevant government bodies;
  • Keeping and the maintenance of the statutory books & records;
  • Advising on all secretarial duties and its functions;
  • Accounting and bookkeeping obligations;
  • Preparation of the annual accounts;
  • Advising on the VAT registration and VAT keeping records;
  • Preparation of the VAT returns;
  • Advising on accounting records for the VAT purpose;
  • Taxation services (personal, corporate, inheritance, capital gains);
  • General tax planning;
  • Self-assessment records and its further filings;
  • Payroll;
  • Preparation and submission of the annual statutory accounts with Companies House;
  • Completion and submission of corporation tax returns with the HMRC;
  • Completion and submission of the annual returns with the Companies House;
  • Dealing with all correspondence to and from the HM Revenue & Customs.

Our flexible, relationship-based model facilitates our collaborating with you to truly understand your objectives and help you attain them. We tailor our services and approach to meet your needs.

Establish a Flat or a Property Management Business Online: Free Company Name Check with the Companies House


Establish a Flat Management Company Before attempting to register flats management business or to form your property management company, it is important that you check if the proposed name for your business entity is available for the registration. In the event that the proposed name is unavailable - or is too similar to an existing company, you will not be able to incorporate a company with that name. Instead, you will need to provide an alternative limited company name for the further name check. Sometimes, it is possible to incorporate a company with an alternative corporate name, with the inclusion of another word, for an example: 'My Business Limited' may be too similar to another company or identical to it; but the 'My Business London Limited' may make it acceptable.

Sensitive words may hinder your company name formation from being processed (a list of sensitive words can be found on our website). In the event that your proposed company name contains a sensitive word, you will have to pay an additional administrative fee to have it included and in some cases, you will have to provide proof that you are eligible to register a company of a certain nature.
Company name & business trade name check:    Free company name & business trade name check online

Register a Flat(s) Management Limited Company in the UK: About Our Electronic Companies Formation System
 

Our electronic filing system makes setting up a flat(s) management company straightforward and very simple. It automatically produces and customises all the required paperwork's, including the memorandum and articles of association, the first meeting of the board of directors and the company register.

You may use our electronic filing programme to register the following type of companies in England, Wales, Scotland and Northern Ireland: -

  • A private company limited by shares;
  • A private company with the bearer shares;
  • A private company limited by guarantee (without of charitable objects);
  • A community interest company;
  • A flat or property management company;
  • An RTM: the right to manage company (limited by shares or limited by guarantee);
  • A holding, or an intellectual property management company, etc.

Other Ordering Paper-Filing Registration Options: Start a Flat(s) Management Business Within 24 Hours
 

Starting a small flats management business entity in your own interest in England, Scotland, Wales, and Northern Ireland (Belfast) or Republic of Ireland (Dublin). With our new online electronic flats management companies formation system, we lead you through the each step of your private limited by shares, or guarantee company formation process. It could not be any faster and easier!

We appreciate that not everyone likes to place orders over the Internet that is why we are happy to take orders via an e-mail and by post or by the fax; though we prefer to have the order in writing to avoid any kind of possibility of errors or omissions. With the old-style paper forms formation you may enjoy with the following benefits: -

  • We may register a flat management company in 5-7 days or we may still apply for a same-day formation;
  • We may register your flats management company with the standard (Companies House model) or the nonstandard (extended and upgraded) version of the articles of association;
  • We may add your logo to the memorandum and articles of association, so Companies House will have your memorandum and articles of association with your logo on their database;
  • We may use the special or specific fonts for your memorandum and articles of association;
  • Your flats management company subscribers needs to sign the memorandum and articles of association, and their signatures will be in the Companies House' records;
  • With this paper forms filing service, we can register a flat management company and use the specific accents, signs or punctuations (À, Á, Ä, È, É, Ë, Ï, Ñ, Ó, Ö, Ú, Ü, etc.).

If you prefer the old-style (paper filing) incorporation service rather than an electronic incorporation filing and you would like to discuss how the Coddan might help you, please call any of our office numbers or complete our incorporation enquiry form.

If you prefer to order flats management company registration by phone or via an e-mail, or if you would like to place an incorporation order at our office, for an initial discussion, with no obligation please call us at +44 (0) 207.935.5171, or 0330.808.0089 and benefit from our personal guidance in registering the flats management company. We are looking forward to serving you.

Starting a New Flats Management Business: Online Flats Management Company Formation
 

Starting a Flat Management Company Many small businesses choose to use the services of flats management companies formation agents, like Coddan; to undertake all of necessary formalities on their behalf. Our aims are to provide you with the professional, affordable range of business support services to enable you to incorporate and run your own successful flats management business.

We offer one of the most customisable, cost-effective, and affordable properties management company set-ups for small businesses. Unlike other companies providers and companies formation agents, who hide up the front of incorporation costs, our fees are very simple. We offer a new flats management company incorporation only for £149.89 - no hidden costs, annual fees, memberships or other pricing strategies. In fact, we guarantee that our flats management business registration and management service fees are the lowest that you may find.

Starting a new flats management company under new Companies Act 2006, is not particularly complicated.

There is a still requirement that application for the flats management company registration should be submitted to the Companies House with the signed copies of the memorandum and articles of association (if company chooses to file one). There are no more requirements that application for management company registration to be signed in front of the notary public, solicitor or a commissioner of oath, but application itself is now a bit more complicated then old forms 10 and 12 used for the company formation before final implementation of Companies Act 2006.

Application for the flat management company registration must contain the following information: -

  • The proposed of a company name;
  • The location of the registered office address;
  • The type of the company to be registered;
  • The type of the model articles of association to be used (if company chooses to use the model of articles provided by the Companies House);
  • The statement of the proposed officers;
  • The statement of the capital & initial shareholding (or membership) or statement of the guarantee for companies not having share capital;
  • The statement of the compliance.

Coddan can make all this process much simpler for you. When applying for online flats management company incorporation service from Coddan, all you need to do is to complete our online incorporation order form for the type of a company you have selected and we will take care of formalities.

When applying for a flat management company formation with Coddan, our clients have the option to choose from the standard memorandum and articles of association provided by us and the customised articles of association drafted by our specialists. Customised articles of association prepared by Coddan provides the full description of the company's proposed activity, share (or membership) capital, the location of the registered office address, rights & responsibilities' of directors and shareholders (members) and much more.

We can also register your flats management company using your own memorandum and articles of association. You just need to complete our online registration order form, and then e-mail us the memorandum and articles of association that you want to register your flats management company with us. However, please make sure that your memorandum and articles of association complies with the requirements of new Companies Act 2006. If your application will be rejected by the Companies House, due to the provision of the wrong documents, Coddan will not be able to offer you refund for flats management companies registration process.

Do You Need a Flat Management Company? What is a Flat Management Limited Company?


Flat Management Limited Company In law, a limited company is a 'person' in its own right. This means it can own property (such as a freehold or leasehold) and enter into contracts in its own name. It exists independently and separately from the people who manage or own it. There are different types of limited company: "public companies", whose shares can be bought and sold by the general public, and "private companies". It is unlikely that a public company would be suitable as a flat management company. When a property is divided into a number of flats, each flat owner usually has a lease of their own flat, but they may also be a member of a management company that owns the freehold (or lease) of the entire building. As members of the company, the flat owners have their say in running it. If the members own shares in the company, it is common practice in the company's constitution (its "articles of association") that shareholders who sell their flats must also transfer their shares to the new owners. This ensures that, at any given time, the limited company represents the interests of all the current flat owners, and it remains a separate legal entity regardless of who holds its shares.

Some limited companies do not have shares and are instead "limited by guarantee". In England and Wales, this includes commonhold associations and the "right to manage" companies. If your company is limited by guarantee, it means that the members have agreed to contribute to the assets of the company if it is wound up. In this web-page, the term a "shareholder" and "member" means the people who own the company. Instead of having a company, you may wish to consider two other options: -

  • If your organisation does not own property but simply collects money from residents for repairs and maintenance, and pays bills when they arise, then less formal arrangements may be appropriate such as a residents association.
  • Residents could consider buying the freehold of their properties in their own names or as trustees.

If you are uncertain whether the options above are appropriate for your circumstances you may want to seek professional advice.

Why To Register or Incorporate a Property Management Company?


There are many reasons for forming and registering a limited company. Outlined below are a few reasons, which relate to flat management companies. This list is not exhaustive.

One reason for residents in a block of flats to have a limited company is to own the freehold or head lease. Freehold gives outright ownership of the property to the limited company. A head lease is a lease granted directly to the limited company, which turn grant subleases of the property (or parts of it) to the flat owners. For the purposes of this web-page, the difference between a company that owns a freehold and one that holds a head lease is immaterial.

However, residents often use a limited company for collecting a central pool of cash for carrying out repairs and maintenance to common parts of the property. If a limited company is used in the management of a block of flats it is often a condition of buying a flat that the buyer becomes a member or shareholder of the company. In some cases all flat owners automatically become directors.

Another reason to set up a limited company is so that leaseholders of flats can exercise their right to manage the building they live in. The right to manage must be exercised through a limited company set up for that purpose. This type of company is called a right to manage (RTM) company (please refer to the relevant section of our web-site).

A limited company would also be set-up to own and manage the common parts of a development made up of separate units under commonhold ownership. This type of company is called a commonhold association.

About the Minimum Number of the Officers You Need to Have to Register a Flat Management Company Online
 

Register a Flat Management Company A private flats management company in England or Wales must have at least one director, one shareholder (or a member), and may have a secretary. You need at least one person to form this type of a limited company. If there is only one director, and that director is a natural person in your flats management company, that director can also act as a secretary. A company must have at least one director who is a natural person. This requirement is met if a natural person as a corporation holds the office of director sole or otherwise by virtue of an office.

You can register a sole director' flats management company, if you are familiar with the secretaries duties and responsibilities, because all of them belongs to a sole director. The directors and secretary of your company can also be shareholders ( or members - if your company is limited by guarantee).

The Companies Act imposes no restriction on the minimum age of limited company directors. However, the Companies House will actively discourage the appointment of anyone under the age of 16 from taking up a flat management company directorship on the grounds that the individuals concerned may not fully understand the legal liabilities that go with the position and for the most part will not have the experience necessary to perform the duties of a properties management company director.

Under the Companies Act 2006, there is no restriction on any or all of the members/shareholders being from an overseas country (i.e. outside the United Kingdom in terms of residency, domicile, and citizenship, place of incorporation or all or any of those concepts). Nevertheless, this general proposition may be subject to any applicable foreign investment rules, which may apply from time to time.

It is the criminal offence to appoint a non-existent, not permitted for use or fake details for the company' officers appointments.

Flat Management Company Incorporation Service: Property Management Company Formation in the United Kingdom


A property management company set up under the Companies Act to operate for the benefit of residents or tenants rather than being run as a business for profit is generally known as a "flat management" or "property management" company. Many types of multi-occupancy development, but particularly residential ones, need such a company and they account for a large number of the companies on the register at Companies House.

A flat management company usually has a special memorandum and articles of association drawn up to allow it to own, manage and administer a freehold property, which is normally divided into several dwelling units or flats, with each leaseholder owning a share in the company. The leaseholder is normally obliged to transfer ownership of the share to a new leaseholder if the property is disposed. In cases where there are several tenants flat management companies are sometimes formed to manage and protect the interest of the persons holding leases.

This type of vehicle can take the shape of a company with limited liability company status or as a company limited by guarantee. We have a wealth of experience in both forming and structuring flat management companies and can advise you on whether this type of vehicle is suitable for your needs.

If you want to become familiar with the description and the contents of the British property management companies formation packages, offered by Coddan CPM LTD and to find above, what kind of service is included in this or that UK property management companies incorporation package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the flat management company registration within the Great Britain, please, contact us for the further advice.

Form a flat management company online in minutes at lawyer-free prices. Coddan was developed by expert attorneys with experience at the most prestigious law firms in the country. We've helped over thousands of satisfied customers, and our know-how allows us to prepare the legal documents quickly and efficiently. Our documents contain advanced provisions that are not found in simple "do-it-yourself" kits or manuals.

Coddan lets you take care of common legal procedures without ever leaving your home or an office. Our research area contains plenty of helpful guidance. Simply answer an easy-to-understand questionnaire, and Coddan CPM LTD takes care of the rest: no need to download, no need to print. You will receive the completed legal documents printed on quality acid-free paper.

A comprehensive and bespoke service for company formations including the private companies limited by shares, public companies, companies limited by guarantee, the scope of the standard service will include: -

  • Advice on the availability of the proposed company name;
  • Formation of a company;
  • Holding the company's first board meeting'
  • Providing the statutory books (written up);
  • Issuing shares or mebership certificates;
  • Filing the appropriate documents at Companies House;
  • Providing you with a statement showing the principal details of your company.

Incroporate a British Flat Management Company: How Does a Flat Managament Company Works?


Incroporate a Flat Management Company In law, a limited company is seen as an 'individual' in its own right. This means it can own property (such as a freehold or leasehold) and enter into contracts in its own name. It exists independently and separately from the people involved. As the name suggests, many are connected to blocks of flats where an arrangement needs to be made to deal with the running, maintenance and repair of the common parts of the building.

The leaseholders of the flats are the members of the company, some will be appointed to act as directors and one will usually be the company secretary. They may appoint a managing agent to carry out the day-to-day work, or one may be specified in the leases with the freeholder.

The freeholder of the land on which the flats stand may be held by a third party, or it may be held by the management company (so that the leaseholders have the ultimate benefit of the freehold). The simplest form of flat management company is a dormant one which holds the freehold of the land for the members of the company, who are leaseholders of the flats built on that land.

This type of company can also provide a structure for the management of the common parts of private freehold estates of houses, which may include roads, communal gardens, security and other facilities. A corporate body is needed to hold land, unless there are four or fewer lessees concerned, in which case the freehold of the land could be held jointly in the lessees' own names.

However, if the freehold is held directly by the lessees jointly, then each time a flat changes hands, apart from the transfer of the lease on the flat, there would need to be a transfer of the freehold into the new set of names in the Land Registry. Getting all the necessary signatures and consents would take time and add to costs. The use of a flat management to hold the freehold avoids the problem.

A flat management company may be incorporated under the Companies Acts, either as a limited company with shares, or a company limited by guarantee. Either of these forms of incorporation provides limited liability for its members, subject to the usual caveats in the insolvency legislation about trading properly. Each also provides a corporate vehicle that can hold the freehold (or head lease) which underlies the various occupiers' leases.

It can also collect maintenance charges and any ground rents, hold a sinking fund for major repairs, arrange cleaning, decoration, security, insurance, a warden's salary for sheltered schemes and janitorial or concierge services where appropriate.

The company limited by shares was designed for profit-making enterprises, but with properly drafted articles also works well for flat management companies. When the related property interest changes hands, the leaseholders' share also has to be transferred by a stamped stock transfer form (often for a token payment with minimum (5.00) stamp duty paid) and the change recorded in the register of members. Coddan's articles provide a special procedure to facilitate the transfer of the relevant share if a lease has changed hands but the transfer of the share was overlooked.

The company limited by guarantee was intended to provide a form of incorporation with limited liability suitable for a group of members with a mutual interest of a not-for-profit nature. The main advantage of using a guarantee company rather than a company limited by shares is that no stamped transfer is needed on changes of members (on sale of the related lease). The articles can simply provide for the membership of the outgoing lessee to terminate automatically when they cease to hold the lease, without the need for any document to be signed by that member giving up their membership. The new owner of the lease can then be admitted to membership in place of the outgoing member.

Why Have a Flat Management Company In England, Wales, Scotland or in Northern Ireland?


Why Have a Flat Management Company Flat management companies are companies used to manage the whole of or parts of a site or building on behalf of its owners. When there are multiple tenants, Flat Management companies are normally used to protect the interests of the leaseholders. In shared properties there are often a number of areas that are common and used by all flat/unit residents.

For example, communal halls, access areas and gardens. By having a Flat Management Company you can establish a system for collecting pooled funds in order to maintain and repair any common areas. If the company will not own the freehold for the entire property then it may not be appropriate to have a Flat Management Company. A residents association may be more suitable.

Many tenants and owners of properties in the UK make contributions to management companies and various service charge funds or sinking funds. These funds pay for a variety of services and sometimes accumulate money for future repairs. Typically, residents of a block of flats will all pay a set amount each year into a fund. That fund will either pay for joint day to day running costs of the block, such as cleaners and minor repairs, or funds will be put aside to pay for future major expenditure such as a roof repair. Some funds may do both within one fund.

The charges may typically be paid to a management company, which could manage just that block of flats or any number of blocks. Sometimes residents of a block will set up their own management company, residents' association or trust to receive the funds and carry out the work. Sometimes the landlord/freeholder holds the funds and organises the work.

What if a Member Sells Their Flat?


If the company is limited by shares, the company's articles of association will usually require the seller to transfer the shares to the buyer. If the company is limited by guarantee, then the company's articles of association may require the seller to sign a form to resign as a member (forms should be available from the company secretary) and deliver it to the company: or the change of membership might happen automatically, depending upon what the articles say.

The Constitution of a Flat Management Company
 

A flat management company has its own memorandum and articles of association specially drawn up to allow the company to own, manage and administer the property, which is normally divided into several dwellings, units or flats. When a property is divided into a number of flats, each flat owner has a lease of their own flat but they may also hold shares in a management company that owns the freehold (or lease) of the entire building.

From time to time, it may be necessary to change these documents. You can make these changes by a special resolution or a written resolution (that is proposed as a special resolution). The nature of the change may be subject to other statutory procedures and requirements. For example, if a company wishes to change its name, it does so by passing a special resolution.

Transfer of Shares: Change of the Ownership
 

As shareholders or members, of the flat owners have their say in running the company. Normally, the company's constitution will say that shareholders who sell their flats must also transfer their shares to the new owners. This ensures that - at any given time - the limited company represents the interests of all the current flat owners. However, it remains a separate legal entity regardless of who holds its shares from time to time. The same aspect applies for companies limited by guarantee.

Formation of the UK Flat Management Companies: Service Charge Funds & Sinking Funds Background
 

Many tenants and owners of properties in the UK make contributions to management companies and various service charge funds or sinking funds. These funds pay for a variety of services and sometimes accumulate money for future repairs. Typically, residents of a block of flats will all pay a set amount each year into a fund. That fund will either pay for joint day to day running costs of the block, such as cleaners and minor repairs, or funds will be put aside to pay for future major expenditure such as a roof repair. Some funds may do both within one fund.

The charges may typically be paid to a management company, which could manage just that block of flats or any number of blocks. Sometimes residents of a block will set up their own management company, residents' association or trust to receive the funds and carry out the work. Sometimes the landlord/freeholder holds the funds and organises the work.

The Property Management Companies: Funds Created
 

Property Management Company Typically there are two main types of fund to which Section 42 LTA 1987 applies. Sinking funds involve the long term setting aside of funds for major repairs and renewals. Over a period, the fund can grow to a significant size and generate substantial investment income. Service charge funds are funds where the intention is to cover only the routine day-to-day costs of maintaining the communal areas and paying for minor repairs and decorations.

The service charges are reviewed annually and set at a level to balance the actual expenditure and leave a 'no surplus - no deficit' situation at the end of each year. In practise there may be a small amount held in reserve or carried over from the previous year. The trust will not accumulate any surplus charges or create any sort of contingency or sinking fund. Any investment income is derived only from the short- term deposit of temporarily surplus funds. Some trusts will act both as a sinking fund and as a service charge fund, although usually the trustees would keep the two funds separate.

There are a number of different situations in which sinking funds or service charge funds may be created. Not all of these will necessarily fall within the scope of Section 42 LTA 1987.

Operating as Flat Management Companies: Tenants of Rented Property
 

Under the terms of a rental contract either the tenant or the landlord will be responsible for repairing the property. If the landlord includes in the rent payable some figure to cover his repairing obligations the fact that the payment by the tenant will be part of his rent will not preclude the operation of Section 42 LTA 1987. However, in order to fall within the definition of 'service charge' the amount must be variable according to the costs or estimated costs of repairs etc.

So if the lease simply states that part of the rents payable will be used for servicing, repairs and maintenance etc. for which the landlord is then responsible then the matter is outside Section 42 LTA 1987 because the payments by the tenants do not amount to a 'service charge' as defined in Section 18 LTA 1985. The whole of the rent will be Schedule A income of the landlord.

Flat Management Companies: Leaseholder Owners of Property
 

Under the terms of the lease the leaseholder may have to pay into a service charge fund or sinking fund. The funds may be paid to an individual, a company, a trust or an unincorporated association. As the owner owns the property under a lease, the LTA 1987 will apply. If the lease specifies contributions are to be made to a service charge fund or sinking fund then an accumulation trust exists whether the funds are paid to an individual, a company, a trust or an unincorporated association.

The body holding the funds may not consider themselves to be trustees, for example a company. However if Section 42 LTA 1987 applies then the company will be holding the funds as a trustee.

If the lease stipulates that tenants must pay a service charge for particular services to a service company which is not the landlord, connected with the landlord or stipulated by the landlord, this too is within Section 42 LTA 1987. In that Section 'the payee' is defined as 'the landlord or other person to whom any such charges are payable by those tenants under the terms of their leases'. If the lease states that the tenants should arrange for services, repairs and maintenance etc. themselves but does not specify how this should be done, any arrangement made by the tenants with a service company is outside the scope of Section 42 LTA 1987. The costs in respect of service charges are not made either to the landlord or to another person to whom such charges are payable under the terms of the lease.

Finally where there is no provision in the lease for the tenants to pay into a service charge fund, but nevertheless they decide to create one, then such an arrangement is not within Section 42 LTA 1987 as the tenants are not 'required under the terms of their leases to contribute to the same costs by the payment of service charges'.

British Flats Management Companies: Freehold Owners of Property
 

Under the terms of sale of a freehold property (a covenant of some sort) the freeholders may have to pay into a service charge fund or sinking fund. The funds may be paid to an individual, a company, a trust or an unincorporated association. Such an arrangement does not come within Section 42 LTA 1987 as it is not under the terms of a lease. Alternatively there may be no provision to create a service charge fund or sinking fund but the freeholders together decide to form one.

They may decide to pay those contributions to an individual, a company, a trust or an unincorporated association. Again this is a private arrangement not governed by Section 42 LTA 1987 and the tax treatment depends on what the freeholders decide is going to hold the funds.

Flat Management Companies: Registered Social Landlords & Other 'Exempt Landlords
 

Flat Management Companies Registered Social Landlords (RSLs) are, in England and Wales, independent, private sector, non-profit making bodies whose main purpose is to provide decent quality, affordable housing for people on low incomes. About three-quarters of them are charities. Section 42 LTA 1987 does not apply to tenants of 'exempt landlords' (Section 42(1) LTA 1987). In accordance with Section 58(1)(g) LTA 1987 a RSL is an exempt landlord. There are other exempt landlords defined in Section 58(1)&(1A) LTA 1987 such as district councils and certain development corporations. See TSEM5745 where Section 58(1)&(1A) LTA 1987 is reproduced.

Whilst Section 42 LTA 1987 does not apply to RSLs and other exempt landlords, as explained below, the terms under which sinking funds and/or service charge funds are held by exempt landlords may still create a trust. Thus, in summary, reference must be made to the terms of the lease to determine the application of Section 42 LTA 1987. A statutory trust will arise where the tenants of two or more dwellings are required under the terms of their leases to contribute to the payment of variable service charges to the landlord or other persons to whom such charges are payable under the terms of the leases. However, Section 42 LTA 1987 does not apply where the landlord is an 'exempt landlord'.

Flat Management Companies: Funds not Within s. 42 LTA 1987
 

Where a fund exists but it is not within Section 42 LTA 1987, for example where freehold owners of property decide to create a sinking fund, or because the landlord is an RSL or other 'exempt landlord', then the treatment of that fund will depend on what structure is used. An individual holds the funds. The individual could be an employee, trading as a maintenance contractor or could hold funds as trustee for the freeholders. If the latter then the sort of trust depends on the terms of the trust, not on Section 42 LTA 1987.

A company holds the funds. Assuming the company was formed to hold funds for the freeholders who created it, then it could hold the funds as trustee. Alternatively it could trade as a flat management company receiving payments under a contractual arrangement to supply services and pay corporation tax. The status of the fund will depend on the terms under which the payments are made and the terms under which the company holds the funds.

A trust holds the funds. It could be any sort of trust depending on the terms of the deed but it would not be within Section 42 LTA 1987. An unincorporated association holds the funds. This could, for example. be a residents' association. It would be liable to corporation tax unless it was acting as a trustee. Again any trust would not be within Section 42 LTA 1987. Any funds that the trustees held would be subject to the normal trust rules. It is possible for the funds to be held under a bare trust, interest in possession trust, discretionary trust or accumulation trust arrangement. The exact status will depend on the terms and nature of the trust agreement.

Flats Management Companies: Investment Income Previously Charged to Corporation Tax
 

In the past some flat management companies have been permitted to make returns in respect of investment income, arising on service charge funds and sinking funds, as part of their corporation tax returns (see PIM1070). That is no longer appropriate where trustees are holding funds as trustees under Section 42 LTA 1987. Likewise where Section 42 LTA 1987 does not apply but the terms under which the funds are held creates a trust.

Rents receivable by flat management companies (such as ground rents - other than peppercorn rents) are outside the scope of Section 42 LTA 1987 and remain chargeable under Schedule A. Tax Bulletin Issue 37 (October 1998) explained the approach the Inland Revenue will take for all flat management companies as from 1 April 1998. However, because of the need to issue further guidance in Tax Bulletin Issue 48 (August 2000), no action will ordinarily be taken to disturb any year or Accounting Period for which a Corporation Tax return has already been made and accepted. Where a trust return has not previously been made by a flat management company, or a trustee, of investment income arising from a fund within Section 42 LTA 1987 (or from funds otherwise specifically held on trust), the trustees will have the normal obligation to notify chargeability.

Property Management Companies: Notification From Company's Tax Office
 

Where you receive a notification from a tax office dealing with the company's corporation tax, that a flat management company trust has been identified, you should set up a new record, and issue any trust SA returns, which are required. The company tax office will advise you as to the date from which trust liability first arises, and this can be from any date in the tax year. If for example the CTSA return covers the accounting period to 31st August 1999, the first period of trust SA liability will be the part year from 1 September 1999 to 5 April 2000.

Flat Management Companies: Residential Service Charges
 

Flat Management Companies Section 42, Landlord and Tenant Act 1987 (LTA87/S42) provides that contributions to variable service charges (and to sinking funds) in respect of residential property should be paid into a trust fund.

Under the old CT Schedule A rules (which applied up to 31 March 1998), the Revenue (now HMRC) took the view that service charges received by flat management companies were normally within the scope of Schedule A notwithstanding the provisions of LTA87/S42. This was because the charge under old Schedule A was based on the receipts to which a landlord was entitled in a chargeable period - old ICTA88/S15 (1) 2. However, where service charges received by occupier controlled flat management companies were matched over a period of up to five years by admissible expenses, no Schedule A charge was normally imposed.

HMRC has been asked whether the position has changed under the Schedule A rules introduced by FA98/S38 and FA98/SCH5. Under Schedule A, it is necessary to consider the profits of the Schedule A business (calculated, in the first instance, in accordance with Schedule D Case I rules and correct accountancy principles). As from 1 April 1998, residential service charges received by occupier controlled flat management companies will ordinarily be outside the scope of Schedule A since, under correct accountancy principles, it will not usually be correct to include in the computation of profits sums to which the landlord is not beneficially entitled.

Consequently, where an occupier controlled flat management company receives residential service charges for periods subsequent to 31 March 1998, such sums will ordinarily be received as capital in the landlord’s capacity as trustee (under LTA87/S42). Investment income arising on such sums held in a designated bank account will be chargeable on the trustee at the rate applicable to trusts (Section 42 contains an implied power to accumulate).

Rents receivable by flat management companies (such as ground rents - other than peppercorn rents) are outside the scope of LTA87/S42 and remain chargeable under Schedule A.

This article sets out the line the Revenue (now HMRC) will take for all flat management companies as from 1 April 1998 but no action will ordinarily be taken to disturb the treatment accepted on specific cases prior to that date.

Where a trust return has not previously been made by flat management companies of investment income arising from a fund within LTA87/S42 (or from funds otherwise specifically held on trust), the trustees will have the normal obligation to notify chargeability.

A further article provides more detailed guidance on the scope of LTA87/S42, what trustees should do where it applies and what to do where it does not apply. For convenience this is reproduced below.

What Trustees Should Do?
 

As the TB37 article made clear, in the past some flat management companies have been permitted to make returns in respect of investment income, arising on service charge funds and sinking funds, as part of their CT returns. That is no longer appropriate where trustees hold funds as trustees under LTA87/S42. Likewise where LTA87/S42 does not apply but the terms under which the funds are held creates a trust.

Trustees should write to the appropriate trust office, address below, enclosing a completed form 41G (Trust), or providing the following information for each trust: -

  • The full title of the trust fund;
  • The names and addresses of the trustees;
  • The name and address of any professional agents acting;
  • The date the trust was established under the terms of the lease;
  • The existing CT reference, where appropriate;
  • The gross amount of any investment income received each year that has not been included on a CT return;
  • Whether the trust is a sinking fund, service charge fund or both as outlined above.

Income Chargeable: Commonhold


The commonhold association is a limited company and it is taxed in the same way as a flat management company, except that Section 42 Landlord and Tenant Act 1987 does not apply.

Part 1 of the Commonhold and Leasehold Reform Act 2002 (CLRA02) introduced a new form of land ownership in England and Wales. The CLRA02, together with the Commonhold Regulations SI2004/1829, provides the legal framework for commonhold and came into effect on 27 September 2004.

Commonhold is a new way of owning interdependent freehold properties, such as flats, shops and offices. It is an alternative to long leasehold ownership. It is similar to successful systems that have been in use for interdependent properties elsewhere in the world for many years: for example, condominium ownership in the United States and strata titles in Australia.

A commonhold consists of individually owned but interdependent freehold properties (known as units) and common parts. In a block of flats, for example, each flat would typically be a unit and the remainder, including the structure and exterior of the block, the stairs, hallway and grounds, would be common parts. Each unit is owned by a unit-holder. The common parts are owned and managed by a commonhold association, which is a limited company, of which only the unit-holders may be members. The members will have direct ownership of the unit they own and an interest in the ownership and management of the common parts through membership of the commonhold association.

The commonhold is managed by the commonhold association in accordance with the rules of the commonhold community statement (CCS). The CCS includes provisions prescribed by the Commonhold Regulations SI2004/1829 and local rules specific to the circumstances of each commonhold.

A commonhold can only be created out of registered land and must itself be registered at Land Registry. Applications for registration must be made in accordance with CLRA02 and The Commonhold (Land Registration) Rules SI2004/1830.

The commonhold association is a company limited by guarantee, of which the unit-holders are the only members, which owns and manages the common parts.

The company will levy a commonhold assessment on the individual unit-holders within the commonhold development. This will be used to pay the regular day to day expenses incurred by the commonhold. In addition there will be a reserve fund also funded by a levy on the individual unit-holders for the payment of non-recurring costs for the repair, maintenance or replacement of major items such as the replacement of the roof.

The individual unit-holders are required to pay the levies under the terms on which they acquire their commonhold unit from the company. The receipts arise as a consequence of the company’s property rights and are therefore receipts of a Schedule A business carried on by the company.

There is no concept of mutuality in Schedule A (ICTA88/S21C) therefore the tax position of a commonhold association is analogous to the tax position of a flat management company - see PIM1070. Except that the provisions of section 42 Landlord and Tenant Act 1987 do not apply to freeholders.

The Main Business Characteristics of Flat Management Companies
 

Characteristics of Flat Management Company The establishment of those flat management companies in the study had generally been instigated by developers. Rights conferred by the Landlord and Tenant Act 1987, enabling long leaseholders to collectively purchase their freehold, seemed to have had little direct impact. The majority of companies were limited by share, although some blocks favoured limitation by guarantee. Shares offer certain advantages in relation to the financial liability of members, but a key disadvantage is the occasional losing track of ownership as shares must be transferred when a flat is sold but this is sometimes overlooked. 84% of companies in the study had been incorporated since 1970 and 54% since 1980. However, there was a sharp fall in incorporations since the late 1980s.

The buildings concerned were predominately modern. Over half dated from 1961, and two-thirds were purpose-built. Of the 32% which managed converted houses, the large majority (94%) comprised small units of 2-10 flats. The average rate of owner-occupation was 85%, with some 12% of flats sub-let and 2% unoccupied. These proportions were not greatly affected by type, size or age of block. Small and medium-sized conversions had the highest rates of sub-letting and non-occupancy. The large majority (82%) of companies had a membership rate of 100%, reflecting a policy of membership linked to flat ownership.

Property Management Companies: the Management Quality
 

One of the main benefits identified by all residents was the ability to achieve the best value-for-money management and maintenance, through the payment of acceptable service charges. Directors also valued control over how and when works were carried out, such as whether to appoint contractors or to undertake work themselves. However, there was a general lack of planning for management and maintenance, especially in older blocks (particularly those built before 1914). Nearly half had no formal planning, and this increased to 62% in small blocks of 2-10 units.

The amount and length of forward planning increased with the size of the block. Just under 75% of flat management companies had a reserve fund and 30% had a fund of £1,001-£5,000. This also increased with block size. Service charge arrears were a problem in some blocks and 10% of respondents reported quite severe problems, with over 30% of resident members in arrears. This tended to increase with size of block and was worse where a managing agent was employed. Some managing agents mentioned particular problems with arrears in recent years during the economic recession. Several resident directors said they had come to special arrangements with residents who were in financial difficulty and felt there was a greater effort to pay when neighbours knew about arrears.

The Ownership of the Freehold
 

Fifty-four per cent of companies owned the freehold; this was more common in converted houses and more recent developments and, most particularly, in smaller blocks of 2-10 units, where the figure was 62%. Directors regarded freehold ownership as important where they perceived it would increase their ability to control management. This was usually where the freeholder was unco-operative or where the conditions in leases were unclear. Where the company already had strong powers to enforce regulations, directors did not feel freehold ownership had a significant impact on management.

However, it was still considered important because of the 'wasting asset' problem (as the length of occupation left under the lease reduces annually). Many resident directors expressed a lack of knowledge about rights to purchase the freehold.

Property Management Companies: the Managing Agents
 

Twenty-two per cent of respondent companies employed a professional managing agent. Managing agents and estate agents met with criticism and were judged to give poor professional advice. Information to potential flat purchasers was particularly lacking and the presence of a flat management company was not a factor most purchasers considered explicitly when choosing their first flat. Although the degree of planning was higher with a managing agent, often management quality was no better with an agent than without.

There was often also confusion over the role and responsibilities of the managing agent, especially those playing a 'dual role': for example, where the managing agent is appointed by an absentee landlord but is effectively paid by the leaseholders, or where the managing agent has become company secretary to the flat management company or has acquired the freehold of the block. Residents were more likely to express dissatisfaction where the managing agent was fulfilling more than one role.

Property Management Companies: a Management Code for the Residential Properties
 

Several managing agents said that they would welcome a Code of Practice which set standards against which management quality could be measured and to help them explain to clients about work that often takes place behind the scenes. Both resident directors and managing agents felt there was a need for workable sanctions against poor managing agents, and for the maintenance of some flexibility towards achieving management objectives.

From time to time even the best-run business needs some advice or a second opinion. Healthy businesses plan for the future and having an independent review of your strategy can really help - our consultants act as advisers to many industry sectors and can offer you the benefit of having seen what works and what does not. Using the best accounting, budgeting, planning, and reporting tools, we can ensure that you have all the information you need to face future challenges.

For overseas companies setting up in the United Kingdom, our experience of business practices, taxation, and law within the United Kingdom can save them the considerable time, money, and energy required to establish and grow a business while meeting all of their legal obligations. We can also act as trustees for pension schemes, or alternatively, we can audit your pension scheme accounts, guiding you through the minefield of reporting requirements.

We are always looking for opportunities for your business to reduce its tax liability, with proactive tax planning. We also advise clients on international corporate tax and on issues arising from cross-border transactions, into and out of the United Kingdom.

If you are unsure of the best course of action for your business, Coddan can advise you on the best location and type of business entity, and can tailor a solution to your needs. If you wish to retain Coddan in a professional capacity, you can apply for an initial consultation appointment by following the link below.
Incorporate a Flat Management Company Outside of the UK: the Property Management Companies In USA & Offshore Countries

We can provide tailor-made or ready-made property management companies with suitable memorandum and articles of association for all these circumstances. Every draft provides for the automatic transfer of membership when dwelling or unit holders change. If required we can also provide weighted voting rights in favour of any developers to allow them to retain effective control of the company until every flat or unit is sold.

You may incorporate your property management company offshore with us online! It can be advantageous to buy property through an offshore company. A foreign domiciled person buying property in the United Kingdom should do so through an offshore company for inheritance and capital gains tax protection.

The ownership of overseas real estate and land by an offshore company can often create many tax advantages. Additionally, using a trust or a private foundation to own the shares in the offshore company can give rise to additional tax advantages in the client’s country of residence and simplifies procedures in the event of the client's death.

The main benefits are: avoidance in most cases of local inheritance taxes on the property in the event of death of the beneficial owner. Avoidance in most cases of local succession laws which can, in certain countries, stipulate to whom the property must pass. Elimination in most cases of local transfer and capital gains taxes upon resale of the property. Simplification of procedure upon resale of the property through the sale of the real estate holding company to the buyer saving both time and costs.

Exclusion of foreign exchange controls restrictions, in certain countries, in the event of the beneficial owner taking up residence in the property. Ease of transfer to heirs in the event of the beneficial owner's death. Confidentiality of ownership.

After advising on and establishing the structure appropriate to each client's requirements, the Coddan provides all necessary services to ensure that each offshore company is professionally maintained. These include the provision of directors, secretary, registered office and nominee shareholders, the holding of statutory meetings and the filing of statutory returns.

Coddan recognises its responsibilities for managed companies, and ensures that, when required, information is speedily communicated to clients; legal representation is readily available; and all audit requirements are met.
You May Use This Form to Incorporate a New Flat Management Company in Tax-Havens:    Offshore Flats management Company Incorporation Package From £325.00 

Want to incorporate a flat management company in Delaware, Florida, New York, Nevada or elsewhere? Coddan provides incorporation and LLC formation services throughout the US. We provide everything you need to know about the advantages of Delaware, Nevada, Florida or New York Corporations and LLCs, including an online checklist to walk you through the incorporating process step by step; Big resource section filled with sample corporate and LLC resolutions, forms, and links; Also lots of tips on how to ensure the success of your new corporation or LLC.

The LLC is the preferred entity to own real estate, equipment, boats and airplanes. Many creative estate planning strategies have been developed to utilize Nevada corporations. Estate plans where trusts have traditionally been used can often be restructured more effectively using Nevada corporations. Nevada corporations are generally more flexible and creative when passing estates to heirs than trusts are, while providing similar benefits such as avoiding probate, and potentially eliminating all estate taxes.
You May Use This Form to Register a New Flat Management Company in the USA:    U.S.A. Flats management Company Registration Package From £174.00 

UK or Offshore Companies Formation Live Help


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