Companies House problems

[gardfahl]

This is a strange one but I hope someone can give me some advice.

I recently brought a flat. When I brought it I was told I would have to become a director of a company because that came with the flat.

At the time I just signed and that was that.

Then in January, February time Companies House sent me a letter saying I needed to send in my accounts.

I wrote to them and said "what accounts, this is a private dwelling, it's my home."

They agreed and said not to worry and I would be wiped from the list.

Since then I have received two further letters asking for my accounts and an ominous note saying there was a package from them that needed signing for.

I don't know what that will be until tomorrow.

What should I do? Call companies house and tell them again? Is this just an administrative mistake?

Hope someone can help a worried man

[Indizine]

very strange! you don't have to sign to become a company director whether you buy or rent any private dwelling! Who asked you to sign up?

[GRD Credit]

You mention that you moved into a flat. It is quite common, I think, for residents in a block to set up a flat management company. See below:

How does a Flat Management company work?
In law, a limited company is seen as an 'individual' in its own right. This means it can own property (such as a freehold or leasehold) and enter into contracts in its own name. It exists independently and separately from the people involved.
Why have a Flat Management Company?
Flat Management companies are companies used to manage the whole of or parts of a site or building on behalf of its owners. When there are multiple tenants, Flat Management companies are normally used to protect the interests of the leaseholders.
In shared properties there are often a number of areas that are common and used by all flat/unit residents. For example, communal halls, access areas and gardens. By having a Flat Management Company you can establish a system for collecting pooled funds in order to maintain and repair any common areas.
If the company will not own the freehold for the entire property then it may not be appropriate to have a Flat Management Company. A residents association may be more suitable.
The constitution of a Flat Management Company
A Flat Management Company has its Memorandum and Articles of Association specially drawn up to allow the company to own, manage and administer the property, which is normally divided into several dwellings, units or flats. When a property is divided into a number of flats, each flat owner has a lease of their own flat but they may also hold shares in a management company that owns the freehold (or lease) of the entire building.
Transfer of Shares - change of ownership
As shareholders, the flat owners have their say in running the limited company. Normally, the company's constitution will say that shareholders who sell their flats must also transfer their shares to the new owners. This ensures that - at any given time - the limited company represents the interests of all the current flat owners. However, it remains a separate legal entity regardless of who holds its shares from time to time.

At a guess you seem to have been listed as Company Secretary and therefore responsible for legal documentation. Guesswork as I say, I am no lawyer.

Do you even know the name of the 'alledged' company?

[Peter W]

You are probably the director of a flat management company, which has to file accounts like every other company.

The recorded delivery package is probably just a letter telling you that they are planning to strike-off the company for non-activity.

If the company is struck-off, you lose whatever assets it holds. This might be a freehold interest, so it is best to establish the situation.

What is the company number they are using as a reference when they write to you?

[Maslins]

As mentioned above, this is quite common. The company will probably hold the freehold land that the flat is on, and you will be a joint shareholder with the people living in the other flats.

[gardfahl]

Well I've had a letter addressed as Company Secretary, and the company is called Ethelbert Square Management Company.

It's not a block of flats though, just two flats, ground floor and first floor converted hosue. The company number is 03953602.

I am really confused! This just came up through my solicitors when I bought it and he said for some reason the two flats were set up as a company.

I honestly had no idea that I would be required to submit accounts, moreover what accounts can I submit? I haven't got any nor was I given any when I received all the paper work from my solicitor.

[accountantpete]

Just checked - is it Ethelbert Road Management Ltd?

If so there is a proposal to strike off and the accounts need filing.

I'd contact Co House asap and consult your solicitor asap then get the required accounts in asap

There is an email facility at the Companies House website.

[gardfahl]

No, I saw that one too. It's definetly Ethelbert Square Management Company Ltd.

What confuses me though is this is a domestic residence, not a business. I'm paying the mortgage to own this flat.

[accountantpete]

Aah got you now - its actually Ethelebert Square.

The accounts to 31/3/08 are now overdue by 2 months thats all- so you will get fined £100 or so for the pleasure.

The last accounts filed were dormant accounts but you had better check with a solicitor if any transactions have occurred in the meantime.

[Maslins]

gardfahl, click this link which should hopefully take you to the relevant section for your company on Companies House.

You'd need to check but I'm 99% sure the company will simply own the freehold for the 2 flats. You will own the leasehold of your flat personally (subject to mortgage blabla), as will the owner of the other flat. Then this company owns the freehold (ie the land that both flats are on). You & the other flat owner will presumably both be 50% shareholders of the company, and when one of you sells your flat, you will also sell your 50% share of the company to whoever buys the flat.

The company is not a business in anyway, it is simply a vehicle to own the land that your flats are on.

If you look at that link above, you will see the accounts are overdue (as you're probably already aware). They needed to be submitted by 31 January 2009 (2 months late and counting). The previous accounts (to year ended 31 March 2007) were dormant, and I wouldn't be surprised if the accounts to 31 March 2008 will be too.

You should be able to get an accountant to knock these up for about a hundred quid or so. You'll also probably have already incurred a late filing penalty of £100, which will get bigger if you don't do something about this fairly swiftly.