Setting Up Your Right to Manage Company Correctly

Understanding Right to Manage Companies

A Right to Manage (RTM) company is a collective entity established to manage shared costs for a block or collection of buildings. Unlike traditional commercial ventures, RTM companies are typically structured as companies limited by guarantee. This structure eliminates the need for shareholders and instead grants control to members, typically the residents or leaseholders of the property.

However, it's not uncommon for people to mistakenly register their RTM company as a company limited by shares, likely because the majority of companies follow this structure.

If you've set up your RTM company incorrectly as a company limited by shares, here are your options:

1. Continue with the current structure – You can keep your company limited by shares, but you will need to inform HMRC every two years that your company is an RTM, to avoid being expected to submit a tax return.
2. Register a new company – Unfortunately, there is no formal process to convert a company limited by shares into a company limited by guarantee. You’ll need to register a new company under the correct structure, set up a new bank account, and transfer any assets from the old company. We can assist with the transfer process to ensure everything runs smoothly.

Need Assistance?

If you're struggling with company filings, service charge accounts, debt collection, or bookkeeping for your RTM company, our team can provide expert guidance and support.

Contact us today for a consultation.