Shareholder not shown accounts before submitted to company house

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    #16
    Originally posted by Macromia View Post
    Unfortunately, this is one of the problems with having properties where leaseholders are also either shareholders, or members of a company - anyone who takes a minority position will be outvoted by the remaining shareholders/members.

    In situations like this, the people who are in the minority are typically best off forgetting about challenging things as a shareholder/company member and challenging as a leaseholder. However, if doing this, this need to bear in mind that they may be responsible for a share of the companies costs in defending any action against them - even if they win a legal challenge against the company.

    In this sort of situation, individual leaseholders whose views are outnumbered by other leaseholders, are often better off with an independent freeholder who they can challenge rathe than as a shareholder of a management company. This is why the push for abolishing leasehold in favour of common hold is a bad idea - common hold only works in situations where everyone involved takes into account the interests of everyone in a block and adheres to the requirements of the leases, but many people are only interested in what benefits them personally.
    We recently acted for a minority shareholder in a claim under these provisions of the Act in circumstances where a demand under section 431 was not complied with.
    It was argued on behalf of the company that our client was entitled to no more than a copy of what had been filed at Companies House, namely abbreviated and unaudited accounts. This was in the context of an ongoing legal dispute where the company was seeking to limit our client's access to information.
    The company's position was incorrect for reasons which were explained in correspondence. In short, the issue of whether a company is permitted to file abbreviated accounts at Companies House is entirely distinct from its statutory obligation to prepare full accounts for members.
    However, the company refused to comply and proceedings were issued by our client seeking an Order for the disclosure of the full unabbreviated annual accounts for the previous financial year.
    After hearing from both parties, the Court agreed with our submission that the company was in breach of its duties under the Act.
    It therefore ordered the immediate disclosure of the accounts and the company was ordered to pay our client's costs.

    Comment


      #17
      Hi Stacker,

      I too stumbled across that web page during my complaint.

      If you call them they will speak with you over the telephone and provide you with some free advice.

      Do you receive Service Charge accounts?

      If so does the managing agent file company dormant accounts with CH?

      Comment


        #18
        Originally posted by Stacker View Post
        We recently acted for a minority shareholder in a claim under these provisions of the Act in circumstances where a demand under section 431 was not complied with...
        [etc.]
        I'm not sure what you intended to prove by posting this (which seems to have been copy and pasted from a solicitors website).

        You can take legal action against the company, and it's quite possible that you would win - that was never in dispute.

        However, there is still the question of who actually ends up paying any costs that are incurred both by you and by the company (assuming that they defend against legal action). Even if you win a legal challenge and get your costs awarded against the company, you may still need to pay a share of all costs incurred by the company, included a share of whatever they end up having to pay you.

        The company will likely have no source of income other than money raised from shareholders and/or leaseholders, so whether you have to contribute to the costs will depend on what the company articles and the leases say. If no one has any responsibility to pay costs of defending against legal action and any costs awarded against the company, the result of taking action could be that the management company is effectively bankrupted (potentially without you recovering your costs).

        My point was that taking action against a leaseholder managed company may not benefit you even if you win, not that you can't take action against them.

        Comment


          #19
          Originally posted by fos333 View Post
          My company filed dormant accounts online so no director's report was filed.
          The directors' reports for even trading small companies are generally useless. They typically only contain the statutory, and extremely predictable, minimum.

          If you want a good "directors'" report from a small organisation, you need to go for a non-profit, unincorporated, club or society with a turnover in the triple figures, not any company that uses accountants.

          Comment


            #20
            Originally posted by fos333 View Post
            Hi Stacker,

            I too stumbled across that web page during my complaint.

            If you call them they will speak with you over the telephone and provide you with some free advice.

            Do you receive Service Charge accounts?

            If so does the managing agent file company dormant accounts with CH?
            Thanks again for your help...I receive nothing apart from demands with the service charge bit attached, they dont disclose much.

            Comment


              #21
              Originally posted by leaseholder64 View Post

              The directors' reports for even trading small companies are generally useless. They typically only contain the statutory, and extremely predictable, minimum.

              If you want a good "directors'" report from a small organisation, you need to go for a non-profit, unincorporated, club or society with a turnover in the triple figures, not any company that uses accountants.
              Yes the minimum is what I was after and that is the names of all directors that had been directors through any part of that financial reporting period.

              When you are up against a managing agent that wants to hijack and run your company for their own benefit and not for the leaseholders you attempt to obtain as much information as possible.

              Comment


                #22
                That information can be deduced from the people information available from Companies House.

                Comment


                  #23
                  Originally posted by leaseholder64 View Post
                  That information can be deduced from the people information available from Companies House.
                  Thanks I have written to company's house and made a complaint about not being shown the accounts before filing at CH...anyone have the RICS guide where it quotes managing agent and landlords need to comply with communications as I need to quote this?

                  Comment


                    #24
                    Originally posted by leaseholder64 View Post
                    That information can be deduced from the people information available from Companies House.
                    I know but thank you for your input. However it is still a requirement under s415 CA 2006 if not filing micro entity accounts, unless you can advise differently.

                    I am also trying to save Stacker or others with similar issues wasted time in sharing my past experiences.

                    I also contacted CH, went through the Ombudsman and also a very lengthy RICS complaint.

                    My solution was to obtain support from other members, unfortunately Stacker will not be able to achieve this and should be looking at actions as a leaseholder.

                    Comment


                      #25
                      Most flat management companies are micro-entities.

                      Comment


                        #26
                        Originally posted by fos333 View Post

                        I know but thank you for your input. However it is still a requirement under s415 CA 2006 if not filing micro entity accounts, unless you can advise differently.

                        I am also trying to save Stacker or others with similar issues wasted time in sharing my past experiences.

                        I also contacted CH, went through the Ombudsman and also a very lengthy RICS complaint.

                        My solution was to obtain support from other members, unfortunately Stacker will not be able to achieve this and should be looking at actions as a leaseholder.
                        Thank you for sharing Fos and yes helping other to be aware is helpful...I only have the leaseholder route so going that way hence getting as much professional help as possible to support my case because I can possibly see this going to FTT however my solicitor is advising me to let the others know what the surveyor has said and others, present info and give them a timescale to repair, if they dont then I will get the work done so my flat is safe and habitable then I shall sue for the recovery of monies, claim for damages and my legal costs...

                        Comment


                          #27
                          Originally posted by leaseholder64 View Post
                          Most flat management companies are micro-entities.
                          I would agree that most flat management companies would qualify as micro-entities.

                          However they prefer to file dormant accounts, where the requirement under s415 CA 2006 has not been removed.

                          Comment


                            #28
                            Originally posted by fos333 View Post

                            I would agree that most flat management companies would qualify as micro-entities.

                            However they prefer to file dormant accounts, where the requirement under s415 CA 2006 has not been removed.
                            So could I take the company to court?
                            I came across the following which I foung helpful to distinguish between a shareholder and leaseholder

                            There are both legal and practical reasons why being a shareholder and being a leaseholder is different, even though you could be both.

                            As a shareholder or member of your RMC you will be entitled to take part in decision-making (although this will probably be restricted to voting to remove the board of directors). If you think the board has wrongfully exceeded its powers, you can take the company to Court under the Companies Act 2006. Your liability to the company and its creditors is limited to the extent of your shareholding or guarantee (this is commonly £1). You can’t otherwise be forced to participate in the running of the company.

                            As a leaseholder, you are contractually bound under your lease to abide by the covenants to the RMC or landlord, which will include the payment of service charges. Any breach of covenant would render you liable to Court action (possibly leading to forfeiture of your lease) or an appearance before the First-tier Tribunal (Property Chamber) in England or the Leasehold Valuation Tribunal in Wales.

                            If you think that the RMC is in breach of its own covenants, or has acted or charged unreasonably, then you may take the company to Court or to the Tribunal under Landlord & Tenant legislation. Your rights as a leaseholder are not restricted if you’re also a member of an RMC.
                            An RMC board should never, and has no legal right to, take a decision that’s against the terms of the leases for the block — even if there’s complete unanimity. No managing agent should ever advise this either.

                            Tribunals will not view evidence of meeting agendas and minutes of meetings as relevant to issues that go against the terms of the lease and contravene Landlord and Tenant legislation.

                            Comment


                              #29
                              Hi Stacker,

                              The above is from ARMA guidance note Understanding Residents Management Companies.

                              It basically informs you that as a member/shareholder of the RMC and also a leaseholder you have different rights.

                              From all other posts you have been advised that you will not succeed via the member/shareholder route because you will be outvoted four to one.

                              You have been advised to look at your rights as a leaseholder and you have taken steps as a leaseholder by acquiring a surveyors report, you stated this was the route you were taking.

                              You further say advice from your solicitor has been given and should be followed. Obtain quotes for the work and let your neighbours know and be amicable and reasonable in all correspondence sent.

                              There's no problem in completing a list of non compliance by your directors or managing agent to other issues, however all these issues should be secondary to your main issue of the structural damage to your flat caused by the damp.

                              If you are not receiving Service Charge accounts or statement of expenditure then look to see what the lease states.

                              Comment


                                #30
                                Originally posted by fos333 View Post

                                I would agree that most flat management companies would qualify as micro-entities.

                                However they prefer to file dormant accounts, where the requirement under s415 CA 2006 has not been removed.
                                I couldn't find anything that made dormant and micro-entity mutually incompatible.

                                Comment

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