Limited by shares company with flat management articles

A flat management company — or property management company — is any company set up under the Companies Act to operate for the benefit of residents (or tenants), rather than run as a business for profit. It is also sometimes called a right to manage company, where residents can jointly run a property (for example, a block of flats).

A flat management company can be registered as a company limited by shares or a company limited by guarantee. Both of the company types offer limited liability for its members, subject to the company trading properly in line with insolvency legislation.

Should I choose limited by shares or limited by guarantee for my flat management company?

The main advantage of using a guarantee company is that no stamped (or stamp exempt) transfer is needed for changing members (on sale of the related lease). The articles simply allow for the membership of the outgoing member to terminate automatically. There is no need for any document to be signed by the member giving up their membership, and the new owner of the lease can be added in the place of the outgoing member.

The limited by shares structure is normally suited to businesses for profit, but with correctly drafted articles, this model can also work well for flat management companies. When a property changes hands, the leaseholders' related share should be transferred by a stock transfer form and recorded in the register of members. This can be done with just a token payment and no stamp duty is payable.

What else is required to set up a flat management company?

Similar to any other business, a flat management company will have a structure. This will usually comprise one or more directors and a company secretary. The leaseholders of the flat act as members of the company and will take on these responsibilities. They must also deal with the running, repair and maintenance of the common parts of the building, either themselves or by appointing an agent to carry out the day-to-day work.

It’s also important to note that residents appointed as directors of the company will have legal responsibilities. These include sending details to Companies House about any changes to the company, such as when directors are added or removed. They must also file the company’s annual accounts and a confirmation statement every year.

For detailed advice on this, including how to deal with the landlord of a property, you can contact the Leasehold Advisory Service .

What’s included in this package?

• Formation of your new UK private limited by shares company
• Flat management articles of association
• Super-fast online service (no signatures or paperwork required)
• Digital copies of all company documents (certificate of incorporation, memorandum and articles of association, share certificates, company register with first entries, and minutes of meeting)
• Registered office (London, HA4)
• Director’s service address (London, HA4 for 1 officer)
• Web authentication code
• Printed copies of official documents
• Corporate hijack protection
• Pre-submission review

Optional free extras

• Free business bank account (with cashback offers)
• Free business startup and marketing guides
• Free consultation with an accountant
• Free £75 Google Ads voucher
• Free business phone number
• Free digital marketing consultation
• Free .co.uk domain name
• Free online company manager account (web portal)
• Free customer support for the life of your company