Who can become a director of a RMC?

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    Who can become a director of a RMC?

    Hi, Could anyone advise who can actually become a director of a RMC. We are a block of 30 flats, each flat has one share in the RMC. We employ a managing agent. The RMC holds the freehold to the property. The MA is the company secretary.


    There are currently 2 directors, although only one is effective and is calling all the shots. We basically need more directors so the flats can be run more democratically. The last meeting we had was an AGM in 2017, this was the last time other residents could have their say. The one director calling the shots doesn't want any more meetings, and would like to leave it all to the managing agent (and herself) to make the decisions. It is not going too well.

    Do new directors need to be flat owners, ie shareholders? We have a case of one lady who would like to become a director, but probably for tax reason, her flat is in her daughter's name, so the daughter is the shareholder and she lives elsewhere. Also who decides whether an AGM is called ? Up until 2017 there was one called automatically every year. There are now a number of flat owners (7+) wanting a meeting as communication between residents and management has been poor over the last few years.

    #2
    Hi,

    You should have a look at the articles of association for your RMC which should be available on Companies House website.

    Answers to most of your questions will be found there.

    Comment


      #3
      As above. It is unlikely someone who is not a shareholder can be a director, and also unlikely someone who is not an owner of a lease can be a shareholder.

      There is no absolute requirement to hold an AGM unless the articles say so. You can call an EGM.

      Whether it is democratic or not, it needs to stick to the lease. Cannot generally make a democratic majority decision to breach the leases. So what sort of bad decisions are you talking about in terms of "wanting their say".

      Comment


        #4
        The members can call an EGM / general meeting with the agenda to have more directors.
        The RMC and Agent cannot refuse.
        You send in your agenda to the Co. Sec, and state that is the ONLY agena you want, and that is to propose mr/ mrs X to become a director.
        You need a minimum of 3 new directors, to out vote the current 2, in future.

        Read up on it. AND see http://ram2.hostbyet2.com/ "meetings" - shows you what to do if they refuse.

        You choose your directors by their experience, and not just because they asked to be a director.
        Find out their job. Managers are a starting point.

        Yo can sack the directors later.

        BUT you must allow the managing agent to run the place, otherwise you will be interfering with their expertise, but you MUST keep them in check, as if they do something wrong, it's the Directors that get sued, not them.

        Comment


          #5
          The articles of association (preliminary) state;- 1. "Table A (comp act 1948) shall apply as amended by CA 1967 to 1980 save in so far as they are excluded or varied hereby".

          Table A Sched 1 part 2 appointment of directors states:-
          17. Any person willing to act as director, and is permitted by law, may be appointed director
          a) by ordinary resolution
          b) by decision of the directors

          I can find nothing in the A of A relating to directors needing to be shareholders or owners. 17 above states any person willing to act as director may be appointed director. Some other threads I've read on these BB relate to managing agents being directors, and they are unlikely to be shareholders or owners of a lease.

          The General meetings and resolutions section of the A of A don't say anything about having to hold an AGM but we have a history of holding them.

          As regards democratic decisions, we are not proposing anything that goes against the lease we just want to have more of say in the what goes on at the property. The common areas are becoming shabby, the director reduced the gardeners time (to save a few pounds) without telling the ineffective director or MA. This has been restored because of the outcry. First impressions count.

          As far as the managing agent goes once again we have a case of the tail wagging the dog. As for the director, she is basically in it for herself and her friends (few). She even let one owner (a friend) run a mobile mechanics business from the car park, totally in breach of the lease. There are other things which I'm not going to go into as my main question is relating to who can be appointed as a director, and do they need to be an owner/shareholder?

          There are enough people to call an EGM if an AGM is not forth coming this year. We have people willing to become directors if voted for.

          Comment


            #6
            If the two Directors condone a mobile mechanics business from the car park, even if the other one was not bothered. ALL directors are guilty of breach of the directors responsibilities, and the lease.
            You can, once the others are voted in, remove the 2 original directors for gross misconduct, immediatly after the new names appear on Companies house website, as then you hold a directors meeting, tell them they are sacked and it's immediate due to the seriousness of the problems caused.
            You can, for gross negligence, 3 or how many new directors you have, sack them. But then you have to ratify their sacking from the shareholders, ( get shareholder votes to sack ) but not until the next A.G.M, and with your evidence, they must agree with you.

            You write an agenda Titled Special Resolution ( but not a Special meetng ) to sack the bad directors, if not waiting for the next A.G.M. but the Diretors must, not only receive the agenda to remove them, but to be writen to, to state they are being sacked via the Special resolution, and they may put forward their defence as to why they should not be sacked. they may or may not turn up. But all this is to keep it legal, in that "Eventually" the shareholders dismissed the directors.


            You WANT directors that LIVE there, -- no point otherwise.

            Comment


              #7
              The mobile mechanic is all water under the bridge now Ram although there is a lot more to the story. He had to sell the flat last year as it was his mother's flat and she did not leave a will, she died in 2019. The current ineffective director is 85 and not in the best of health, I certainly don't want her to face a gross misconduct charge. The other residents of the flats never really kicked up much fuss regarding the mechanics work even though there was probably quite a few who didn't like it. Too polite to cause a fuss.

              When I was voted in as a director at the AGM in 2016 I spoke to the mechanics mother when he was repairing yet another car on the car park. She said she would have a word with him. Two hours later he's banging on my door puffing his chest out and with a "what are you going to do about it" attitude. A big argument started on the landing with his mother and my partner also involved. These were our neighbours. The bottom line even though I was unanimously voted for as a director at the 2016 AGM the MA pended my directorship application.

              Found this out later. One of the 9 people who voted for me at the AGM decided to change there vote, it was the now ineffective director, also the resident whose relative's car was being repaired by the mechanic at the time, and who was not at the AGM decided to cast a vote against me. The MA had told the mother of the mechanic that he had to stop repairing cars on a number of occasions. Six months passed before the full story came to light. The final irony,the mother of the mechanic was also a director and chairwoman of the RMC at the time. I washed my hands of the lot of them, the mechanic carried on a reduced repair business until he left.
              The other director was actively trying to find a smaller flat for the mechanic at our block so he wouldn't have to leave. A sorry tale.

              Anyway what's peoples opinion on whether the lady who wants to become a director, and who has been a resident here for the last 3 years, but whose flat is registered in her daughters name, can actually stand to become a director?

              Comment


                #8
                Originally posted by David Mc View Post
                Anyway what's peoples opinion on whether the lady who wants to become a director, and who has been a resident here for the last 3 years, but whose flat is registered in her daughters name, can actually stand to become a director?
                Why is this person a shareholder? It would be a pretty off AoA for a company that permitted non-lessees to be shareholders.

                Basically you are describing a situation where you will have no power or say regardless of whether you are a director - otherwise you would have simply removed the offending directors a long time ago. Being a Director where you have basically no say (such as removing Directors) is a bad place to be. Best not to be a Director.

                Comment


                  #9
                  I give up.

                  Apply to the F.T.T. to appoint a manager. That is your only option.

                  Good luck

                  Comment


                    #10
                    Originally posted by David Mc View Post
                    Table A Sched 1 part 2 appointment of directors states:-

                    17. Any person willing to act as director, and is permitted by law, may be appointed director
                    a) by ordinary resolution
                    b) by decision of the directors

                    I can find nothing in the A of A relating to directors needing to be shareholders or owners. [...] General meetings and resolutions section of the A of A don't say anything about having to hold an AGM but we have a history of holding them. [...] We have people willing to become directors if voted for.
                    Hi, RTM company articles also have no requirement that a director must be an existing lessee or a member of the company. It is what it is. Leasehold law in all its unworkablenessism.

                    This is why managing agents take on directorships and sometimes run RMCs/RTMCs alone or maybe with a 'sleeping' elderly director who can be surprised to find they are still a director as nobody ever talks to them.

                    Just keep repeating... This is leasehold. It does not have to make sense.

                    I suggest you stop conflating loads of undoubtedly frustrating history, put it down to leasehold life with little productive point being outraged, and focus on the prize --- how to get the company back on track and the members in control of directors again.

                    Read the articles and related CA 2006 clauses and call a members' EGM if the one director refuses for the purpose of electing more directors. Perhaps there will be stalling steps but again and again repeat to yourself "this is leasehold".

                    No point asking here for an opinion why somebody can be a director if that is what the articles allow. You deal with the cards you have been dealt. This is leasehold.



                    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.

                    Comment


                      #11
                      You can call a meeting of members under s303 Companies Act 2006 because collectively you hold more than 5% of the voting rights.You can request the agenda to include appointing and removing directors. You do not need a special resolution to remove a director and only members may remove directors. You have a Company which existed prior to 2006 so unless the Articles have been amended, it should still hold AGMs.

                      Comment


                        #12
                        Thanks for all the info/advice, encouragement/discouragement.

                        I will email the MA, who is also comp. sec, asking if there are any plans to hold an AGM this year. If we are not having one or he can't give me a reasonable timescale for having one I will advise him that I will call an EGM under section 303 of CA 2006 for the purpose of electing new directors to the board of the RMC, I will not call for the removal of existing directors (at this stage). The lady I mentioned in my first post will be one of the names going forward as a new director. If her nomination is rejected to it will be interesting to see what reasons they give. There shouldn't be any problems with the other nominations. Thanks again

                        Comment


                          #13
                          "it will be interesting to see what reasons they give"

                          The Directors and Managing company nor agent appoint directors -

                          The shareholders vote in directors, - show of hands at a meeting, + proxy votes and they are not going to tell you why they rejected nominations of directors.
                          You don't go round to every one who did not vote for a certain director, saying "Why did you not vote for Me, him, her

                          Comment


                            #14
                            It depends on the Articles but directors are often permitted to appoint new directors.

                            Comment


                              #15
                              ram
                              "it will be interesting to see what reasons they give"

                              What I mean by this is the MA not even putting her name forward to be voted for at the AGM
                              There's an earlier post, post #3, that states "It is unlikely someone who is not a shareholder can be a director". It's nothing to do with a show of hands, it wouldn't even get to that stage if the last sentence was true.

                              eagle2
                              The directors can appoint new directors in our Articles, but it's unlikely to happen in this case as the current director doesn't want to appoint any new directors.

                              Comment

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