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Setting up a management company and buying freehold
144
Posts: 7 Forumite
Hi All,
Looking for some help on the freehold enfranchisement process specifically related to the management set up.
Shortly a building with 4 flats (converted) will be taking the freehold enfranchisement route. All 4 landlords are happy to be involved. Nice and easy so far.
As part of this we will need to set up a Ltd company to own the freehold and manage the building. This is where I have some questions.
1. The company will have 4 directors - does this in anyway link these people together outside of the company.
2. I understand after year 1 you can ask companies House to register it as dormant as its a freehold management company, however if there is money coming in and going out (not for profit) to manage the company (gardening, communal lights, savings for roof etc) does this matter? Will tax returns be needed still?
3. A bank account will need to be set up to manage this building per the above. What is the best way to set this up? 4 directors on one account seems messy and will surely link everyone together financially, but a single person may be perceived as risky for the others.
Any advice here would be greatly received.
Thanks
Looking for some help on the freehold enfranchisement process specifically related to the management set up.
Shortly a building with 4 flats (converted) will be taking the freehold enfranchisement route. All 4 landlords are happy to be involved. Nice and easy so far.
As part of this we will need to set up a Ltd company to own the freehold and manage the building. This is where I have some questions.
1. The company will have 4 directors - does this in anyway link these people together outside of the company.
2. I understand after year 1 you can ask companies House to register it as dormant as its a freehold management company, however if there is money coming in and going out (not for profit) to manage the company (gardening, communal lights, savings for roof etc) does this matter? Will tax returns be needed still?
3. A bank account will need to be set up to manage this building per the above. What is the best way to set this up? 4 directors on one account seems messy and will surely link everyone together financially, but a single person may be perceived as risky for the others.
Any advice here would be greatly received.
Thanks
0
Comments
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Being Directors of a Ltd Co does not create any financial link, neither does having a Ltd Co bank account.
It looks like HMRC may decide to treat as dormant after the first year if you are careful ...
https://www.gov.uk/set-up-property-management-company
You still need to file with Companies House even if dormant.0 -
Great thank you for the information!0
-
Being Directors of a Ltd Co does not create any financial link, neither does having a Ltd Co bank account.
It looks like HMRC may decide to treat as dormant after the first year if you are careful ...
https://www.gov.uk/set-up-property-management-company
You still need to file with Companies House even if dormant.
[FONT=Verdana, sans-serif]In the OP's case the ltd co is going to own the freehold as well as manage so will be collecting ground rent and maybe making a profit, does that make a difference? [/FONT]0 -
[FONT=Verdana, sans-serif]In the OP's case the ltd co is going to own the freehold as well as manage so will be collecting ground rent and maybe making a profit, does that make a difference? [/FONT]
Depends what they decide to do. Once they own the Freehold they could decide to extinguish the ground rent.0
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