Accounting for RMC

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    #61
    1 It is a matter professional etiquette that an accountant enquires if there is any professional reason why he should not accept a new appointment, The outgoing accountant should confirm immediately.
    2 The outgoing accountant should handover all records within his possession eg books, accounts, documents and details of any adjustments which he has had to make.
    3 They are obliged to handover all accounts and cannot challenge your authority, just refer them to Companies House
    4 There is no reason to supply them with a copy of the minutes.
    5 to 7 You can threaten to report them to their governing body, if they are members of the ICAEW, that is where complaints should be addressed. Complaints forms are usually available on the relevant web sites. You usually need to supply evidence that the complaint has been
    sent to the accountant and adequate time has been allowed for a response.

    Comment


      #62
      Ok thanks, I have already sent a Formal Complaint to the Accountants and referred them to Companies House so I will wait for their response.

      Comment


        #63
        Nothing is easy dealing with the husband of the Director. He is instructing the accountant to not handover the accounts and they are not answering my emails or recognising my position as Director.

        I have reached another brick wall.

        I have filled out a complaint form with the ICAEW but there are long timelines involved before they do anything. What else can I do to enforce them to handover the accounts?
        I cannot risk missing another filing deadline under my name as Director. The fines double each year.

        Comment


          #64
          I don’t think the accountant will hand over any information - it may take a court case to get it which will involve more time and money which I have neither.
          There is clearly a lot of misconduct in relation to the accounts so no doubt a lot of debt.

          Is the better option to strike off the company and start again?

          Comment


            #65
            Would setting up a new company (RMC) negate the appointment of the Manager as well?

            Comment


              #66
              Trying to get the service charge transaction history (Trust Account) from the bank and this is their response below.

              Do you understand the banking system and how I can obtain the transaction history. The name and maybe the account number was probably changed deliberately by the Directors to prevent me from accessing it.

              I personally last paid money into the Company Trust Account account on 28.06.19 and have been paying into it since 2016 so there is no doubt of it's existence you would not believe it would be too difficult to locate. It is a Trust account and the Company is the legal trustee.

              The bank's response:-
              " We do not have an open account with this number. Unfortunately we can only search closed accounts by name and I have not been able to locate a closed account with this number searching on variations of XXX XXX Service Charge Trust.

              If we did hold an account with this number it will indeed be closed. As I have not been able to locate the account using the information provided I am unable to ascertain when it would have been closed. I could locate a closed current account for XXX XXX ( closed in 2015, not the number you have quoted) and that account was held with our Banking Services department, not Commercial Banking.
              "

              Comment


                #67
                Can anyone tell me what are the rules about closing a trust account (ring fenced in line with S.42) holding the service charges.

                1.The company has not been struck off so the account should not have been closed.
                2. Is the bank obliged to tell me as Director of the RMC where the balance has been transferred to? Or does data protection not allow this.
                3 I have asked the bank to tell me who closed the account , on what date and where the balance was transferred to but they have said they can’t give me these answers due to data protection.

                Comment


                  #68
                  Originally posted by SHill View Post
                  Nothing is easy dealing with the husband of the Director. He is instructing the accountant to not handover the accounts and they are not answering my emails or recognising my position as Director.

                  I have reached another brick wall.

                  I have filled out a complaint form with the ICAEW but there are long timelines involved before they do anything. What else can I do to enforce them to handover the accounts?
                  I cannot risk missing another filing deadline under my name as Director. The fines double each year.
                  You can only refer the accountants to Companies House to prove that you are a director and that the previous director has no authority to act, You can make a formal complaint and threaten to recover from them any costs which arise.

                  Comment


                    #69
                    Originally posted by SHill View Post
                    I don’t think the accountant will hand over any information - it may take a court case to get it which will involve more time and money which I have neither.
                    There is clearly a lot of misconduct in relation to the accounts so no doubt a lot of debt.

                    Is the better option to strike off the company and start again?
                    It would be complicated to strike off the company and start again, the rights and liabilities under the lease would need to be transferred to the new company and there could be objections from the other members, the manager and the creditors of the existing company. It would also deter prospective purchasers of the apartments..

                    Comment


                      #70
                      Originally posted by SHill View Post
                      Would setting up a new company (RMC) negate the appointment of the Manager as well?
                      The appointment has been made by the Tribubal which would not be affected as such, one of the parties to the case would no longer exist, The manager is working to the terms of the lease which do not change, The Tribunal would need to be satisfied that the new company is entitled to takeover the terms of lease and manage the building. If you are not careful, you could end up with a permanent appointed manager. Probably better to remove the manager first before considering setting up a new company, although I would not recommend a new company.

                      Comment


                        #71
                        SHill,

                        You should be able to obtain statements of the bank account. The name of the account should have been supplied to you and you can demonstrate that it was open in June 2019.

                        Comment


                          #72
                          Originally posted by SHill View Post
                          Can anyone tell me what are the rules about closing a trust account (ring fenced in line with S.42) holding the service charges.

                          1.The company has not been struck off so the account should not have been closed.
                          2. Is the bank obliged to tell me as Director of the RMC where the balance has been transferred to? Or does data protection not allow this.
                          3 I have asked the bank to tell me who closed the account , on what date and where the balance was transferred to but they have said they can’t give me these answers due to data protection.
                          There is only a requirement to keep service charge monies separate from the RMC's own funds, there is nothing to stop the RMC from transferring monies from one bank account to another, but obviously you as a leaseholder should have been told where the monies are held and where to pay service charges.
                          The RMC is entitled to ask the bank for a statement of the account and if it is unclear from the statement, where the monies were transferred, I cannot see that data protection enters into it, the RMC is responsible for the monies and it needs to account for them. You, as a director, are asking for the information on behalf of the RMC so that you can fulfill your duties.

                          Comment


                            #73
                            A lot has happened since my #62 post.

                            1. The Accountant is refusing to accept my instructions requesting him to hand over the Company information and accounts to the new Accountant. He is aware that the Company has massive penalties because of the late filing of the 2018 and 2019 accounts and the 2020 are due by 30 September.

                            2. The Accountant has told me that he has been advised that my appointment as Director is unlawful and I must provide him with the copies of the notices, the minutes of such meetings, and all matters surrounding my appointment.

                            3.I do not think I am obliged to do this. He will just hand them over to the husband of the previous Director who is not a member of the Company nor a leaseholder or an officer of the Company and he will in turn hand them over to the other man who has been masquerading as Company Secretary and acting as proxy. If they were both entitled to the Company information they would obtain a copy from the previous registered office.

                            4. Prior to my appointment as Director, the man masquerading as Company Secretary, tried to file a paper application to appoint himself as Company Secretary but Companies House rejected it. He has written to the Tribunal and has confirmed that he is still acting for the Company (Respondent) and my appointment as Director unlawful .

                            5. The 2nd Respondent the previous Managing Agent has not complied to the further Directions to hand over the bank accounts and service charge information by 1 July 2021.

                            6. I have written to the bank to request a copy of the banking transactions for the Trust account. The bank has told me that account has been closed and have said they are not obliged to tell me when the account was closed, by whom, or where the money has been transferred to. The leaseholders are the beneficiaries of this account.

                            7. I have told the bank the trust account is the bank account that held the service charge monies of which the RMC is the legal trustee, the legal payee as defined in s.42 (1) LTA 1987 even if the service charge monies were paid to the previous managing agent.

                            8. I sent a Formal Complaint to the Bank and the response was the same - they are not obliged to provide me with the information I have requested. As legal payee surely the Company has the right to the information but the husband of the previous Director is advising everyone my appointment as Director is unlawful.

                            9. I have hit another brick wall. The new Accountant has said he cannot proceed until he has the information to file the accounts. We have another penalty looming for the late filing of 2020 accounts to add to the 2018 and 2019 (approx £4,000 for 2018 and 2019).

                            10. What is the next move. As Director I am now responsible for paying the penalties. We are again at a stalemate.

                            11. Until I can get the accounting information I can do nothing about the Companies House penalties.

                            12. Until I can get copies of the banking transactions I am unable to enforce the previous Directors significant service charge arrears which would put some money in the pot.

                            13. Even though Companies House have me field as a Director no one else is accepting it.

                            14. I don't think the Tribunal will remove the manager while everything is still up in the air.

                            Any advise would be greatly appreciated.

                            Comment


                              #74
                              I suggest that you contact the accountant again and inform him that he has no grounds for stating that your appointment is unlawful and refer him again to Companies House, inform him that he is not entitled to further information, he is not entitled to take instructions from individuals who are not officers of the Company and remind him that he is no. longer instructed to act and to hand over any accounting records to the new accountant, Also confirm that a formal complaint will be made to the ICAEW,

                              If the accountant will not supply accounts, I suggest that you take the accounts filed on 28 August 2018 and simply amend the dates. You will need to delete the sentence within note 1 which states the trust bank balance because you do not possess the information but nothing else changes. I suggest that you file the accounts at Companies House which will trigger fines and send the bills to the manager for payment.

                              I suggest that the Company requests bank statements from the Bank and explains that the account was set up in accordance with s42 and the Company needs the information in order to comply with its obligations.

                              I suspect that no-one else other than you paid any service charge monies and the agent needed to withdraw monies in order to pay bills, probably the management fee,

                              Don't worry about the Tribunal, they are unlikely to accept anything other than what is recorded at Companies House. It does indicate that the other individuals may take legal action but the burden of proof switches to them and their mismanagement of the Company will work against them. Until the uncertainty is removed, it is probably better to keep the manager in place.

                              Comment


                                #75
                                The accounts response and reasons for not handing over Company information as follows:-

                                We have been informed by 75% of the shareholders, or their legal representatives, that your appointment was unlawful. That is why we have asked to see the notices and minutes of the meeting. The implication is that you have decided to appoint yourself as both the sole director and company secretary, and have done so without following proper procedures. Until we find out the true legal situation, we are at a bit of a loss. The fact that Companies House records your appointment is not sufficient. I could appoint myself as a director to any company where we have the Companies House authentication code, but it wouldn’t be lawful without shareholder consent and the implication is that you have voted yourself in, holding 25% and that’s just not sufficient, because 75% of shareholders disagree and claim they were not notified – you claim they are untruthful, they claim you are – they (and their legal representatives) are the majority of course. No other shareholders, nor their representatives received notices of meetings -that is what we are being told by the other 75% (incl. legal representative). It would be unusual for a solicitor of the high court to lie to us, so I am rather hoping that you can produce the documents we have already asked for to clear this matter up and any misunderstandings that may have arisen.

                                Suffice it to say that lawyers acting for the other shareholders have instructed us NOT to release information to you. You are telling us we must because you are the sole director, and so we may need to take our own legal advice on this matter, because as I say above, we are told your appointment was unlawful.

                                I also note you have placed yourself as the person(s) of significant control at Companies House and this is also incorrect. See attached for the definition - People with significant control (PSCs) - GOV.UK (www.gov.uk)


                                All Shareholders received the notices. They were also the Directors at that time.

                                I would be grateful for your comments please.

                                Comment

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