RTM companies- changes pending

[jeffrey]

As from 1 October, to coincide with implementation of the Companies Act 2006 so far as not yet in force, legislation about the formal constitution of statutory RTM companies (Memorandum of Incorporation, Articles of Association, legal capacity, etc.) will change.

For official news of this (and a short-duration 'Consultation' by HMG), mentioned to me by Jordans, see http://www.communities.gov.uk/publications/housing/rtmcompanyarticlesn

[Gordon999]

What's needed is permanent status as dormant company and total exemption to making company annual returns.

[jeffrey]

What's needed is permanent status as dormant company and total exemption to making company annual returns.
To make your views known, reply to the Consultation within time.

[Kenny]

More people should be encouraged to send responses but it would be good to air some ideas here as well.

Personally I think the problems will persist as long as the government is obsessed with treating home ownership on par with businesses.

Don’t know that a dormant company is the answer. There should be a new purpose built corporate body which is subject to its own rules specific to home ownership only. The 2006 Companies Act is the longest piece of legislation ever – how are “normal people” supposed to get their heads around it? Why should standard company articles apply to RTM or RTE companies?

There is one significant change that is being proposed which may not be easily noticed . In the old articles, art 87 grants additional rights of inspection of books and records. These are not available to companies generally (only a right to see the annual accounts exists). The new version – art 47 reads “No right to inspect accounts and other records”. Why should members of the RTM company be precluded from seeing records of the company? The usual reason is to aid business efficacy – ie to allow directors free hand in running the business without interference from the shareholders. But is this relevant to an RTM company? The same applies to freehold companies owned by leaseholders – - most of which are subject to standard articles - many are run by a small group of directors – not always in the interests of all the members – as many postings on this forum illustrate.