5 Statutory Responsibilities of a RMC Director: Part 1
A Director of a Residents Management Company has the same legal and statutory responsibilities of any Director of a Limited Company.
- Follow the company’s rules as set out in its Memorandum & Articles of Association.
- Keep company records and report changes to Companies House.
- File your company’s accounts and your company’s tax return.
- Tell other shareholders if you might personally benefit from a transaction that the company makes.
- Pay corporation tax.
You may be fined, prosecuted or disqualified if you don’t meet your responsibilities as a Company Director.
(Of course, you also have to fulfill the Operational duties of being a Director of a Residents Management Company!)
It’s a good idea to hire professionals to manage these statutory obligations (for example, a Managing Agent or an Accountant), but please remember YOU are still legally responsible for your company’s records, accounts and performance. Selecting a competent professional is a necessity – don’t just focus on the fee!
- Memorandum & Articles of Association-gives details of the company’s name, the purpose for which it was incorporated, the amount of share capital and the value of each share (unless the company is limited by guarantee), and the rules and regulations by which the company is run.
- Company records
- includes records about the company itself, such as the names of directors, shareholders and company secretaries, the registered office address for where company records are kept and where correspondence may be sent and received, the results of any shareholder votes or resolutions, a register of ‘people with significant control’ (i.e. details of any one person who controls more than 25% of voting shares, and even if there is no one person with significant control you still need to keep a record).
- Also Accounting Records to include all money received and spent by the company, details of assets owned by the company, debts the company owes or is owed, invoices and receipts, petty cash books, bank statements, contracts, sales ledgers and correspondence
- Accounts and Tax Return. Often these will be prepared by an Accountant appointed by the Directors, but the Directors still have responsibility for ensuring that the records are available to the Accountant and that the Annual Accounts and Tax Returns are filed at Companies House and with HMRC by the relevant filing deadlines.
- Director’s Benefits. You must inform Shareholders if you receive any kind of benefit. For example, if you supply goods or services to the company for which you are paid. This is often done by a note in the accounts and also possibly at Shareholder meetings
- Corporation tax. If your company is liable to pay corporation tax than you as a Director must ensure that this is paid from company funds and within the deadlines set by HMRC
These are the Statutory duties of a Company Director. In addition, a Residents Management Company Director has responsibility for a range of Operational matters for their Block or Estate which will be the subject of part 2 of this series.