Reporting the directors of a RMC to be unfit

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    Reporting the directors of a RMC to be unfit

    Hello...and thank you for listening
    I am wondering if one could report the RMC directors to be unfit - several breaches of Companies Act - blackmailing / coercing the residents / misleading statements regarding the right to acquire the freehold - probably false accounting ( still investigating this). Talking to the other residents is not an option as the directors have misled them as to their rights and they believe that any objections would cost them money. Most of them are pensioners and they can't afford legal expenses --- also, they are not versed in company & leasehold law.
    The RMC should be not-for-profit -- the accounts show differently? - and the Insolvency service says that we can only report a trading company???
    Please help!

    In practice, this is almost impossible.

    I don't understand the not for profit thing. How are the profits being distributed. It is normally possible to get dispensation from tax if temporary excesses are always used for future expenditure. NB. service charge monies are never beneficially owned by the company and therefore don't affect the company profit situation. Many RMCs probably still fail to distinguish between service charge monies and company monies.

    You can report breaches to Companies House, but it is unlikely they will start a prosecution for an RMC.

    Really there are only two ways of dealing with a rogue RMC:

    - get the members to vote the directors out of office;

    - get the FTT to appoint a manager, who will take over all service charge responsibilities.

    You seem to have ruled out the first and the second definitely will cost the leaseholders money.

    You seem to have started tow threads on the same basic issue; I believe that is against the forum rules. The other thread is As discussed in the other thread, transfers from the payment on account to the reserve fund are internal operations within the service charge trust, for any vaguely normal lease, so don't constitute a profit for the company. Service charge monies should not appear on the company end of year balance sheet.


      Hello Leaseholder 64,
      Thank your for your reply. I didn't think that they are the same issues ...that's why I started another post. I can now see how they can have a common point. To my mind, whether I can report the directors was different to what is the correct account report for a RMC. My apologies.
      Sorry to hear that if one is a RMC director can be very costly or emotionally stressful.


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