How To Set Up A Right To Manage Company

You and your fellow tenants have decided to manage your block of flats. You've had some meetings, found all the information that you need and found a solicitor experienced in setting up right to manage companies to help you. In fact, you have learnt that it is actually this right to manage, or RTM, company, that will nominally exercise the right to manage and be responsible for the management rather than yourselves. This is because you might move on at a later date, but the company that you have set up will still exist to manage the block of flats.

Although following the right to manage procedure and creating a right to manage company might not be overly complicated, it needs to be done in an organised fashion and executed with precision in order to avoid future problems. Your right to manage solicitor can help you with those and ensure each leaseholder fully understands and is aware of various aspects of the RTM company. In brief, this includes:

- in order to be a legal company your right to manage company must have an Articles of Association. This regulates the running of the company and its purpose -exercising your right to manage leasehold property.

- when it comes to the registration of your RTM company you will need to draft a Memorandum of Association. This memorandum is a formal document which lists all the leaseholders whom are involved in the right to manage company. Here they will be setting their intention to create the company

- the information necessary for the creation of right to manage companies is set in Statutory Instrument 2009 No 2767.

When you decide to create your right to manage company your RTM solicitor will take you through the process step-by-step, this will make sure that you do not miss anything vital and the procedure is as pain free as possible.

A good source of information can be obtained from Companies House and leaflets, such as:

- Resolution (GBA7)

- Annual Returns (GBA2)

- GBA1 - or Directors and Secretaries Guide

- Accounts and Accounting Reference Dates (GBA3)

At this initial stage, to establish the right to manage company, you will only need enough qualifying leaseholder participants to have a chairman, directors and a secretary. Nevertheless, in order to run a successful right to manage company you will need a group of dedicated and responsible leaseholders who know what the process will involve.

After the RTM company has been set up and registered, it is obligatory that the rest of the leaseholders are invited to join (including the landlord).

Talk to your solicitor to get the process completed properly and soon you can be enjoying the ability to manage your own block of flats. And most importantly, when selecting a right to manage solicitor, make sure that you pick someone with the right type and amount of experiences surrounding right to manage companies.