Directors Appointment and change of registered address

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    #16
    Some clarifications and long commentary a-coming...

    In post #1 you say you got leaseholders details from LR and called an AGM? Did you get them to sign guarantor slips and set up a new Members register? No need to worry about the original qualifying tally as an RTM company seems to need no particular tally of flats post acquisition.

    Assuming you held the 'AGM' based on an up-to-date member's register, I'd assume you were ok to go with the new three directors.

    You said in post #1 the bank confirmed not a trust account?

    You said in post #4 the bank requires existing mandated signatories to 'sigh off' new signatories? The bank has to answer for not having a trust account and I'd assume should bend over backwards to sort this out for the RTM company.

    The alleged attitude creates a catch 22 if company directors resign suddenly - as they do - sometimes en masse.

    My understanding was that submitting evidence of a properly called company general meeting and copy of members' register and attendance and voting at GM on specific resolutions and proof of identity of new directors would suffice for a reaosnable bank to accept new mandates? Old account is no good unless changed to trust account status anyhow.

    Not sure why you have such an obstacle going forward?

    Three lawfully appointed directors outvote one in RTM company articles, even if said one is a 'chair' of directors.

    Call a meeting under Article 12(1) "The general rule about decision-making by directors is that any decision of the directors must be either a majority decision at a meeting or a decision taken in accordance with article 13."

    "14.—(1) Any director may call a directors’ meeting by giving notice of the meeting to the directors or by authorising the company secretary (if any) to give such notice.
    (2) Notice of any directors’ meeting must indicate—
    (a) its proposed date and time;
    (b) where it is to take place; and
    (c) if it is anticipated that directors participating in the meeting will not be in the same place, how it is proposed that they should communicate with each other during the meeting.
    (3) Notice of a directors’ meeting must be given to each director, but need not be in writing. "

    Minute the directors' meeting. If the 'rogue' fails to participate via phone or other method - you don't have to fly out to foreign climes - exercise the force within you as three directors.

    Sack that chair of board role (if exists) forthwith by majority vote.

    Vote by majority to open a new client account in name of RTM company and serve valid invoices on all lessees (if pending) and direct all lessees to pay into the new account - same as if setting up new RTMC.

    Vote to cancel existing invoices and issue new ones - buit irregular buit word the invocies perfectly to explain not double demanding - might be too late for those keen lessees who pay in advance or on the button.

    Whether the company has lawfully terminated the 'rogue' director yet or not, three directors outvote one. Keep minutes.

    This doesn't get the money back by itself, but stops the rot going further and you need funds to run the gaff.

    You said in post #7 that the 'rogue' took over management functions and paid himself a salary etc? Claims to have a service contract?

    OK Now he has to reveal all this to the three new directors. The aticles require keeping records for ten years - Article 20; and any member, let alone the diretcors, can use artilce 41 to inspect any documents (save redacted confidential material).

    Given the RTM director role comes without remuneration except via the consent of members given in general meeting (article 24), the 'rogue' has to produce documents of how come paying self a 'salary' out of the service charge account as apart from 'reasonable expenses' under article 25. If acting as agent then needs to show the service agreement. Mind you, not sure why simply creating one now wouldn;t cover the 'rogue' because the RTM articles are a dog's dinner about whether one directors can create a fiefdom for self. Article 12 talks about one director but also twaddles on about "if the articles do not require more than one" yet the Model Articles are prescribed and can only be tinkered with in small ways.
    All a mess.

    Still, the Law Commission is promising to report soon on RTM. That's something to look forward to.
    Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

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      #17
      The responsibilities on the bank the trust fund are actually the other way round. The legislation that would require a nominated account was never commenced, so it is only best practice. On the other hand, at least for Barclays, it is a breach of the terms of service to use a normal business account for trust money, and a client account must be used instead.

      You can't rely on banks to be aware that their customer is an RTM, and an RTM will find it very difficult to have any money not held in trust.

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        #18
        If they are issuing VAT invoices and not registered for VAT , you should report them :

        https://www.gov.uk/report-vat-fraud

        Comment


          #19
          Mr.Soffit thanks again for the elaborate email and apologies for a delayed response.
          We are still waiting for the bank to revert. They say the new mandate is being processes. If the bank sorts this out in the next few days that will save us from pain of going thru setting up another account.

          Thanks for the guidance on setting up a new register. I’ve noticed that on the CH website some RTM companies have all the members listed on there (no such registration of details and making the records public was ever done by the rogue). Would You recommend making members details public? what are the pros and cons here.

          We will also reissue new invoices however. I was unsure if this should be done after a PM is appointed? so as to pass this piece of work to the professionals and to reduce any exposure for the newly appointed directors. Do we need Directors liability insurance If yes what would it cost roughly with a basic estate of 100 flats? which insurance companies provide this type of insurance?

          ​​​​​​As for the directors salary, Rogue claimed that it was decided in an AGM. the resolution said that the director is entitled to a renumeration but no specifics were mentioned in the minutes of how much etc. The article requires that the salary should be approved in an AGM but the then CoSec and PM declined to sign those minutes, disputting those meeting minutes.

          As for the directors service contract, My understanding is that any such service contract must be circulated to the members in accordance with s188 of companies act. Members must approve it under 188 (2)(a) and the company must serve a notice to CH informing them of the directors service contract within 14 days under 228(4) CH Confirmed last week that they have received no such notice. Members have never seen any service contract. So in my opinion all of the salary and managing agents fee was a unauthorised which contravenes the law.
          Some of his actions were clearly abuse of power. To make him personally accountable what is it that we must do? Where do we begin?

          More importantly we need advice on how to force him to give us a proper handover. The ex cosec whose residential address was being used as the company RO has denied possession of any company property. He certainly has all the necessary info but he is playing difficult. We informed hi, of legal breaches when company information is destroyed purposefully. What remedy can we seek here and which court should we reach out to.
          Any other specific guidance on handover would be greatly appreciated.

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