I own a flat which is in a converted house consisting of a number of other flats and the owners all have a share of freehold. A limited company is in operation with one sole director working alongside a management company.
Does the existing sole director have the authority to approve/reject the appointment of further directors? A number of other owners are interested in becoming joint directors but I am not sure if this can happen without the approval of the sole director. I have read the ‘Incorporation’ document on GOV.UK for the company but am not sure exactly how to interpret it.
So if each owner, including the director, has one share, then at the next AGM, if other residents want to become directors and the sole director does not want to accept them, would we first need to not approve the re-appointment, then all vote for a new directors?
There’s a legal position and then there’s a practical one.
Directors and the management co all have to work together whoever they are.
Ultimately they can be removed by a shareholders meeting (the leaseholders will be the shareholders i ‘think’)
'While it is legally possible for every single leaseholder to be a director, it is usually more practical to appoint a smaller, dedicated board to make day-to-day management decision"
Each Leaseholder should hold one share and therefore have equal voting rights to appoint / sack the sole director or appoint a group of director’s to give proper leaseholder representation for the management company to adhere to the groups wishes Re: maintenance of common parts of block, accounts for services provided etc. This should all be laid out in the Incorporation document.
Thanks everyone. So I presume if we have 2 people that want to also be directors and appointed before the next AGM, they should request this to the current sole director. If he does not approve then at the AGM all shareholders would have the right to vote for whoever they want to be director(s).
Yes, It would seem sensible and adheres to normal small company practices. There is a practical side to this.
Each year the company accounts are submitted to companies house. The date of incorporation dictates when the accounts for that year close and by which date latest are they to be sent in.
Also a ‘Confirmation statement’ (formerly called company return) is submitted to Companies House. This confirms names and addresses of all directors, share held, etc. Co. Secretary.
You need to check if the Management Co does this on the Companies behalf. (Probably)
check and agree all this at an AGM or Emergency AGM if urgent.
Am only referring to my situation where 3 flats in converted house have 3 leaseholders and are 3 Directors + Double hatted as a Co. secretary. Ltd Co is Dormant and I submit all yearly paperwork to companies house to maintain Co. existence. Freehold is vested in Ltd Co. We share cost of Building Insurance and any periodic maintenance btw the 3 of us by prior agreement. No external management co required.
Thanks, that’s all very useful information. I am not sure who submits the documents to Companies House but I do know the Management Company do a lot of organising, including insurance via a broker and of course they do charge a fee (around 10% of all our service charges) for their services.