Limited Right to Manage Company - CCJ

Hi,

I'm 1 of 3 flats that are part of a Limited Right to Manage Company, this means the freeholder has given over us the right to manage the freehold, and we pay our own liability, buildings insurance etc.

One of the other flat owners who is registered on companies house as a director, as am I, forgot to do the company filings in time. Companies house are now saying that we owe £375, I dont think I should be paying towards the fine as the past 3 years hes done it all - so its been assumed that he has taken this responsibility.

However we now have a claim form from the County Court, He is unwilling to pay this. The alternative option he's said is to dissolve the company and start a new one for the RTM.

I'm considering paying £375, as I dont want anything against my credit file as im a listed director.

What are peoples thoughts of this? Could we dissolve the company and start a new one for £40, as I dont think its right that I should have to pay the fine to get us out of this.

I'm also concerned about the CCJ getting put on my file as I am a listed director

Comments

  • Grumpy_chap
    Grumpy_chap Posts: 14,422
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    Hi,

    I'm 1 of 3 flats that are part of a Limited Right to Manage Company, this means the freeholder has given over us the right to manage the freehold, and we pay our own liability, buildings insurance etc.

    One of the other flat owners who is registered on companies house as a director, as am I, forgot to do the company filings in time. Companies house are now saying that we owe £375, I dont think I should be paying towards the fine as the past 3 years hes done it all - so its been assumed that he has taken this responsibility.

    However we now have a claim form from the County Court, He is unwilling to pay this. The alternative option he's said is to dissolve the company and start a new one for the RTM.

    I'm considering paying £375, as I dont want anything against my credit file as im a listed director.

    What are peoples thoughts of this? Could we dissolve the company and start a new one for £40, as I dont think its right that I should have to pay the fine to get us out of this.

    I'm also concerned about the CCJ getting put on my file as I am a listed director
    All the Directors (I assume 3) are equally liable for the Ltd Co. complying with the necessary filing obligations.  The Ltd Co. needs to meet this late filing penalty.  That means each of the leaseholders ultimately paying one third each, even if in the immediate term the funds are from the Ltd Co reserves.
    Dissolving the company and starting a new one won't resolve the current debt as HMRC will block the dissolution.
  • macman
    macman Posts: 52,955
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    As directors, you are jointly and severally liable. How you allocate the blame between you is a private matter in which HMRC is not interested. 
    No free lunch, and no free laptop ;)
  • Hi,

    I'm 1 of 3 flats that are part of a Limited Right to Manage Company, this means the freeholder has given over us the right to manage the freehold, and we pay our own liability, buildings insurance etc.

    One of the other flat owners who is registered on companies house as a director, as am I, forgot to do the company filings in time. Companies house are now saying that we owe £375, I dont think I should be paying towards the fine as the past 3 years hes done it all - so its been assumed that he has taken this responsibility.

    However we now have a claim form from the County Court, He is unwilling to pay this. The alternative option he's said is to dissolve the company and start a new one for the RTM.

    I'm considering paying £375, as I dont want anything against my credit file as im a listed director.

    What are peoples thoughts of this? Could we dissolve the company and start a new one for £40, as I dont think its right that I should have to pay the fine to get us out of this.

    I'm also concerned about the CCJ getting put on my file as I am a listed director
    All the Directors (I assume 3) are equally liable for the Ltd Co. complying with the necessary filing obligations.  The Ltd Co. needs to meet this late filing penalty.  That means each of the leaseholders ultimately paying one third each, even if in the immediate term the funds are from the Ltd Co reserves.
    Dissolving the company and starting a new one won't resolve the current debt as HMRC will block the dissolution.
    This is the issue, it's been setup quite poorly.

    3rd landlord isn't even registered, I came into this and just took it for what it was and did my bit as in paid the building insurance, and then the liability. I've looked further into it recently and on companies house it's just me and one other person.

    If it wasn't paid, would the CCJ solely go against the company name and not our individual credit reports?
  • macman said:
    As directors, you are jointly and severally liable. How you allocate the blame between you is a private matter in which HMRC is not interested. 
    So you think I should just pay it myself and be done with it ?
  • Grumpy_chap
    Grumpy_chap Posts: 14,422
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    This is the issue, it's been setup quite poorly.

    3rd landlord isn't even registered, I came into this and just took it for what it was and did my bit as in paid the building insurance, and then the liability. I've looked further into it recently and on companies house it's just me and one other person.

    If it wasn't paid, would the CCJ solely go against the company name and not our individual credit reports?

    So you think I should just pay it myself and be done with it ?

    This is a debt on the Ltd Co, not the individual Directors / Shareholders.
    It is also a debt owed to HMRC and they will recover their money.  Penalties will accrue on a time-basis if there is delay in payment. 
    Ultimately, if the fee remains unpaid, HMRC will force the dissolution of the company and take the fees from any assets owned by the company ahead of any other creditors.  The assets of the company include the freehold of the property for which the three flats are leasehold.
    Should the HMRC force the dissolution of the Ltd Co., there is every likelihood they would also apply for the Directors to be barred (for a period of time) from holding future Directorships.

    The Ltd Co. should pay the fee to HMRC.  The fee should be met from the funds that the Ltd Co. has.  If the Ltd Co. has no funds, then there should be a charge to each of the three leaseholder for one-third of the amount required.

    It should not fall to just one leaseholder to pay.  Pragmatically, that may be the thing to do here if the other two leaseholders are point-blank refusing.
    BUT, it would set a dangerous precedent.  Say the next bill is £10k to re-roof the whole building.  Would you tolerate picking up that whole tab?
  • Thanks a lot for the advise.

    Maybe ill just have to pay and it be a lesson learnt to me, and I just ensure the filings are done myself from now on.


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