Set up and run a flat management company
You can set up a limited company - sometimes called a Right to Manage or flat management company - so residents can jointly run a property, such as a block of flats.
Property management law is different in Scotland - see the Scottish government’sguidance on property factors.
Set up the limited company
You must follow the normal process for setting up aprivate limited company.
The Leasehold Advisory Servicehas detailed advice on setting up a company to manage property, including dealing with the landlord.
Running the limited company
All the residents who have agreed to be directors will havelegal responsibilities.
You must also send Companies House:
- details aboutspecific changes to the company when you make them, like adding or removing directors
- thecompany’s annual accounts
- aconfirmation statement (previously annual return)
Tax for the limited company
You mustsend a Company Tax Return to HM Revenue & Customs (HMRC) no later than 12 months after the end of the company’s first financial year.
After you do this,HMRC may decide to treat your company as ‘dormant’ - this means that they would not expect your company to send Company Tax Returns for later years.
They may do this if your company does none of the following:
- allow directors who are not residents or leaseholders to be appointed in its articles of association
- does more than manage the property in the interests of shareholders
- make a profit
- need to pay more than £100 in Corporation Tax in a year
- get any income from land
- pay dividends or other payments from profits to shareholders
- own any assets it is likely to dispose of which would give rise to achargeable gain
- make payments that need to be taxed
They will write to the company if they decide to treat it as dormant.
When the company must always send a Company Tax Return
Your company must send a Company Tax Return every year if:
- HMRC does not write to confirm they think the company is dormant
- the company starts doing any of the things in the list above, even ifHMRC has previously said the company is dormant