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| General Advantages Of Limited Liability Companies:
1. Liability is, in the vast majority of cases, strictly limited to the investments made by the shareholders.
2. Company Officers are not personally liable for their actions unless, in most instances, there is a clear and serious breach of their fiduciary duty.
3. Ironically, despite the limited liability, such entities often benefit from 'greater prestige' than their sole proprietorship or partnership counterparts. The reason is probably because such an enterprise normally requires more planning and thus is deemed more credible.
4. They often benefit from significant tax advantages. In fact, many countries around the world give exclusive tax incentives to this type of entity.
5. The rights of shareholders are normally clearly defined and protected. Promotes good record keeping.
6. Corporate taxes only become payable after the end of the financial year. This means that money that would otherwise be taxed on a monthly or quarterly basis is available to earn further money before the final payment of tax.
7. You must appoint a minimum of 1 Director.
8. Directors can be corporate bodies or private individuals.
9. A Director can be of any nationality
10. All companies must appoint a company Secretary. A Secretary can be of any nationality.
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- DEAR VISITORS, If you want to become familiar with the description and the contents of UK company formation packages, offered Coddan and to find above, what kind of service is included in this or that U.K. company incorporation package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the company incorporation within foreign countries, please, select the package you need from the list, situated below the banner. The information in the banner will be renewed according to the package you've chosen. The basic document package we provide will not differ significantly from that available at a major corporate law office.
Form a company online in minutes at lawyer-free prices. Coddan was developed by expert attorneys with experience at the most prestigious law firms in the country. We've helped over 50,000 satisfied customers, and our know-how allows us to prepare legal documents quickly and efficiently. Our documents contain advanced provisions that are not found in simple "do-it-yourself" kits or manuals. Coddan lets you take care of common legal procedures without ever leaving your home or office. We're open 24 hours a day, 7 days a week. Our research area contains plenty of helpful guidance. Simply answer an easy-to-understand questionnaire, and Coddan takes care of the rest - no need to download, no need to print. You will receive the completed legal documents printed on quality acid-free paper.
Did you know that 70% of those who try to complete their own legal documents make mistakes? With Coddan, you can rest assured, knowing that your documents are treated with the utmost care and attention. Before you submit your order, Coddan will review the answers you provide on the questionnaire for consistency, completeness, spelling and grammar. Furthermore, our customer service specialists are available to answer your questions by phone or e-mail. Call us toll-free at (0) 800.081.1510 or (0) 870.080.2320.
With Coddan's lawyer-free service, you can save up to 100% off the rates an attorney would charge for the same procedure. In addition, our fees are "per project", not "per hour," so you will know exactly what the total price will be.
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We strive to be the best legal documentation service on the web. If you are not satisfied with our services for any reason, please contact us immediately and we will either correct the situation or provide a refund, your choice.
Please note » The prices payable for the items that you order are clearly set out in the web site. There will be no contract of any kind between you and us unless and until we receive payment from you. We act as your agent in the incorporation of companies and electronic filing of Companies House forms. We are not able to guarantee that any such filing will be acceptable to Companies House, nor are there any contractual obligation upon us to do so. If Companies House rejects incorporation or other electronic filing, we will credit your account with a full refund and the contract between us will be made void. Companies House does not offer a cancellation facility for the incorporation of companies or the electronic filing of documents. We will be unable to cancel any such submission on your behalf and will not refund any payment you have made. All prices shown at Coddan Web Site (www.uk-companies-formations.co.uk) are in Great British pounds.
Live Help » Live Help is a real time "chat" feature which enables you to interact with a customer service representative without a phone call. Get answers to your questions while using our website. Clicking the "Live Help" button will start an on-line session with one of our representatives. Live Help is currently available during normal business hours. Outside of the above opening hours our business center will be closed. When you click on the button you will see an e-mail form that will allow you to send us a mail with your questions. Live Help is absolutely free! There are no hidden fees. We offer the service as a courtesy to our website visitors.
 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 British 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.
- Flat Management Companies - Service Charge Funds & Sinking Funds: Background
Many tenants and owners of properties in the UK make contributions to management companies and various service charge funds or sinking funds. These funds pay for a variety of services and sometimes accumulate money for future repairs. Typically, residents of a block of flats will all pay a set amount each year into a fund.
That fund will either pay for joint day to day running costs of the block, such as cleaners and minor repairs, or funds will be put aside to pay for future major expenditure such as a roof repair. Some funds may do both within one fund. The charges may typically be paid to a management company, which could manage just that block of flats or any number of blocks. Sometimes residents of a block will set up their own management company, residents' association or trust to receive the funds and carry out the work. Sometimes the landlord/freeholder holds the funds and organises the work.
- Management Companies - Funds Created
Typically there are two main types of fund to which Section 42 LTA 1987 applies.
Sinking Funds involve the long term setting aside of funds for major repairs and renewals. Over a period, the fund can grow to a significant size and generate substantial investment income.
Service Charge Funds are funds where the intention is to cover only the routine day to day costs of maintaining the communal areas and paying for minor repairs and decorations. The service charges are reviewed annually and set at a level to balance the actual expenditure and leave a 'no surplus - no deficit' situation at the end of each year. In practise there may be a small amount held in reserve or carried over from the previous year. The trust will not accumulate any surplus charges or create any sort of contingency or sinking fund. Any investment income is derived only from the short- term deposit of temporarily surplus funds.
Some trusts will act both as a sinking fund and as a service charge fund, although usually the trustees would keep the two funds separate.
There are a number of different situations in which sinking funds or service charge funds may be created. Not all of these will necessarily fall within the scope of Section 42 LTA 1987.
- English and Scottish Flat Management Companies - Tenants of Rented Property
Under the terms of a rental contract either the tenant or the landlord will be responsible for repairing the property. If the landlord includes in the rent payable some figure to cover his repairing obligations the fact that the payment by the tenant will be part of his rent will not preclude the operation of Section 42 LTA 1987. However, in order to fall within the definition of 'service charge' the amount must be variable according to the costs or estimated costs of repairs etc. So if the lease simply states that part of the rents payable will be used for servicing, repairs and maintenance etc. for which the landlord is then responsible then the matter is outside Section 42 LTA 1987 because the payments by the tenants do not amount to a 'service charge' as defined in Section 18 LTA 1985. The whole of the rent will be Schedule A income of the landlord.
- Flat Management Companies - Leaseholder Owners of Property
Under the terms of the lease the leaseholder may have to pay into a service charge fund or sinking fund. The funds may be paid to an individual, a company, a trust or an unincorporated association. As the owner owns the property under a lease, the LTA 1987 will apply. If the lease specifies contributions are to be made to a service charge fund or sinking fund then an accumulation trust exists whether the funds are paid to an individual, a company, a trust or an unincorporated association.
The body holding the funds may not consider themselves to be trustees, for example a company. However if Section 42 LTA 1987 applies then the company will be holding the funds as a trustee.
If the lease stipulates that tenants must pay a service charge for particular services to a service company which is not the landlord, connected with the landlord or stipulated by the landlord, this too is within Section 42 LTA 1987. In that Section 'the payee' is defined as 'the landlord or other person to whom any such charges are payable by those tenants under the terms of their leases'.
If the lease states that the tenants should arrange for services, repairs and maintenance etc. themselves but does not specify how this should be done, any arrangement made by the tenants with a service company is outside the scope of Section 42 LTA 1987. The costs in respect of service charges are not made either to the landlord or to another person to whom such charges are payable under the terms of the lease.
Finally where there is no provision in the lease for the tenants to pay into a service charge fund, but nevertheless they decide to create one, then such an arrangement is not within Section 42 LTA 1987 as the tenants are not 'required under the terms of their leases to contribute to the same costs by the payment of service charges'.
- Management Companies - Freehold Owners of Property
Under the terms of sale of a freehold property (a covenant of some sort) the freeholders may have to pay into a service charge fund or sinking fund. The funds may be paid to an individual, a company, a trust or an unincorporated association. Such an arrangement does not come within Section 42 LTA 1987 as it is not under the terms of a lease. Alternatively there may be no provision to create a service charge fund or sinking fund but the freeholders together decide to form one. They may decide to pay those contributions to an individual, a company, a trust or an unincorporated association. Again this is a private arrangement not governed by Section 42 LTA 1987 and the tax treatment depends on what the freeholders decide is going to hold the funds.
- Flat Management Companies - Registered Social Landlords & Other 'Exempt Landlords'
Registered Social Landlords (RSLs) are, in England and Wales, independent, private sector, non-profit making bodies whose main purpose is to provide decent quality, affordable housing for people on low incomes. About three-quarters of them are charities.
Section 42 LTA 1987 does not apply to tenants of 'exempt landlords' (Section 42(1) LTA 1987). In accordance with Section 58(1)(g) LTA 1987 a RSL is an exempt landlord. There are other exempt landlords defined in Section 58(1)&(1A) LTA 1987 such as district councils and certain development corporations. See TSEM5745 where Section 58(1)&(1A) LTA 1987 is reproduced.
Whilst Section 42 LTA 1987 does not apply to RSLs and other exempt landlords, as explained below, the terms under which sinking funds and/or service charge funds are held by exempt landlords may still create a trust.
Thus, in summary, reference must be made to the terms of the lease to determine the application of Section 42 LTA 1987. A statutory trust will arise where the tenants of two or more dwellings are required under the terms of their leases to contribute to the payment of variable service charges to the landlord or other persons to whom such charges are payable under the terms of the leases. However, Section 42 LTA 1987 does not apply where the landlord is an 'exempt landlord'.
- Flat Management Companies - Funds Not Within S42 LTA 1987
Where a fund exists but it is not within Section 42 LTA 1987, for example where freehold owners of property decide to create a sinking fund, or because the landlord is an RSL or other 'exempt landlord', then the treatment of that fund will depend on what structure is used.
An individual holds the funds. The individual could be an employee, trading as a maintenance contractor or could hold funds as trustee for the freeholders. If the latter then the sort of trust depends on the terms of the trust, not on Section 42 LTA 1987.
A company holds the funds. Assuming the company was formed to hold funds for the freeholders who created it, then it could hold the funds as trustee. Alternatively it could trade as a flat management company receiving payments under a contractual arrangement to supply services and pay corporation tax. The status of the fund will depend on the terms under which the payments are made and the terms under which the company holds the funds.
A trust holds the funds. It could be any sort of trust depending on the terms of the deed but it would not be within Section 42 LTA 1987.
An unincorporated association holds the funds. This could, for example. be a residents' association. It would be liable to corporation tax unless it was acting as a trustee. Again any trust would not be within Section 42 LTA 1987.
Any funds that the trustees held would be subject to the normal trust rules. It is possible for the funds to be held under a bare trust, interest in possession trust, discretionary trust or accumulation trust arrangement. The exact status will depend on the terms and nature of the trust agreement.
- Flat Management Companies - Investment Income Previously Charged to Corporation Tax
In the past some flat management companies have been permitted to make returns in respect of investment income, arising on service charge funds and sinking funds, as part of their corporation tax returns (see PIM1070). That is no longer appropriate where trustees are holding funds as trustees under Section 42 LTA 1987. Likewise where Section 42 LTA 1987 does not apply but the terms under which the funds are held creates a trust.
Rents receivable by flat management companies (such as ground rents - other than peppercorn rents) are outside the scope of Section 42 LTA 1987 and remain chargeable under Schedule A.
Tax Bulletin Issue 37 (October 1998) explained the approach the Inland Revenue will take for all flat management companies as from 1 April 1998. However, because of the need to issue further guidance in Tax Bulletin Issue 48 (August 2000), no action will ordinarily be taken to disturb any year or Accounting Period for which a Corporation Tax return has already been made and accepted. Where a trust return has not previously been made by a flat management company, or a trustee, of investment income arising from a fund within Section 42 LTA 1987 (or from funds otherwise specifically held on trust), the trustees will have the normal obligation to notify chargeability.
- Flat Management Companies - Notification From Company's Tax Office
Where you receive a notification from a tax office dealing with the company's corporation tax, that a flat management company trust has been identified, you should set up a new record, and issue any trust SA returns, which are required. The company tax office will advise you as to the date from which trust liability first arises, and this can be from any date in the tax year. If for example the CTSA return covers the accounting period to 31st August 1999, the first period of trust SA liability will be the part year from 1 September 1999 to 5 April 2000.
- UK Flat (Property) Management Company Formations From £100.00
We offer a range of services for business, including flat management company formation, registered office address in London, Doncaster, Liverpool, Edinburgh and in Northern Ireland. We have been offering UK company formations, nominee directors, nominee secretarial and associated services for over 10 years.
Coddan provides a wide range of corporate services including: company and partnership formation (private companies limited by shares, companies limited by guarantee, PLC public limited companies, flat management companies, joint venture and subsidiary companies and LLP limited liability partnerships). We offer business advice to Flat Management Companies, including incorporation and corporate secretary services. We can help to set up (incorporate) a Flat Management Company under the Companies Act for the benefit of residents or tenants.
With our new online electronic company incorporation system, we take you through each step of your company formation process as quickly and as simply as possible. Coddan provides a cost-effective, rapid service for incorporating companies. Our UK company registration process is completely electronic, with no forms to complete, making us one of the few fully-electronic company formation services in the UK. All you need to do is tell us the name of the company that you would like to form and then leave the rest to us. Your new limited company will normally be formed within 6-8 working hours of request, and minutes later you will receive your Certificate of Incorporation" by email. Documents we send you via email for the electronic package are: Certificate of Incorporation - in PDF format, Memorandum & Articles of Association, First Minutes of Directors meeting, share certificates, Registers of Members, Directors and Secretaries, Directors Interests and Company charges - in Word format. Additional services are available. With all of our formations, the Certificate of Incorporation, the Memorandum of Association and the Articles of Association are all sent to you electronically, by email as Adobe Acrobat files. Acrobat is a free reader program so you don't need anything else to view and print your documents.
It's a simple process to register your company. All you need to do is use the free availability check to see if your chosen company name is available. If so, then fill out a few details using the online forms, enter your payment details, and submit your application. No documents to sign. We form companies with you as the first directors, secretary and shareholders. Our online order form is a completely web based application, whereby all the company details are entered into our system and submitted electronic through The Companies House Filing Service.
| Description of service | Cost | E-Quick Package
We can form a company appointing the individuals named on an application from the beginning. Applicant appointed as company founding Director. Applicant appointed as company Secretary. Company Secretary & Directors appointed electronically. £1,000 Authorised Share Capital. All our Companies are full trading companies which include Certificate of Incorporation & Memorandum and Articles of Association, First Board Minutes of Meeting, share certificates and company register. Fast 6-8 hour incorporation service which enables you to appoint Director & Secretary details straight away. This procedure applies to all or packs with the payment of all government fees. This pack is sent directly to you by E-mail. Other agents form companies using agent director (s) then resign and transfer the shares to your directors, then you need to complete and register Form 288 (a, b) and 287 and 288 (c) by yourself. If you require additional company services such as registered office or company secretary, director, domain name registration, Apostille legalization, printed Memorandum and Articles, Laminated Certificate of Incorporation or telephone/fax forwarding services this package allows you to add all of these services online. | £100.00
| Economy Package
We can form a company appointing the individuals named on an application from the beginning. Applicant appointed as company founding Director, we provide you a prestigious registered office address in Liverpool (you may update this address to Manchester, London or Cambridge address online). Applicant appointed as company Secretary. Company Secretary & Directors appointed electronically. £1,000 Authorised Share Capital. All our Companies are full trading companies which include Certificate of Incorporation & Memorandum and Articles of Association, First Board Minutes of Meeting, share certificates and company register. Fast 6-8 hour incorporation service which enables you to appoint Director & Secretary details straight away. This procedure applies to all or packs with the payment of all government fees. This pack is sent directly to you by E-mail. Other agents form companies using agent director (s) then resign and transfer the shares to your directors, then you need to complete and register Form 288 (a, b) and 287 and 288 (c) by yourself. If you require additional company services such as nominee company secretary, director, domain name registration, Apostille legalization, printed Memorandum and Articles, Laminated Certificate of Incorporation or telephone/fax forwarding services this package allows you to add all of these services online. | £175.00
| Premier Package
We can form a company appointing the individuals named on an application from the beginning. Applicant appointed as company founding Director, we provide you a prestigious registered office address in Liverpool (you may update this address to Manchester, London or Cambridge address online). We provide a nominee secretarial service for 12 months. Including the filing of the accounts and annual returns. £1,000 Authorised Share Capital. All our Companies are full trading companies which include Certificate of Incorporation & Memorandum and Articles of Association, First Board Minutes of Meeting, share certificates and company register. Fast 6-8 hour incorporation service which enables you to appoint Director & Secretary details straight away. This procedure applies to all or packs with the payment of all government fees. This pack is sent directly to you by E-mail. Other agents form companies using agent director(s) then resign and transfer the shares to your directors, then you need to complete and register Form 288 (a, b) and 287 and 288 (c) by yourself. If you require additional company services such as nominee director, domain name registration, Apostille legalization, printed Memorandum and Articles, Laminated Certificate of Incorporation or telephone/fax forwarding services this package allows you to add all of these services online. | £250.00
| Deluxe Package
We provide you a prestigious registered office address in Liverpool (you may update this address to Manchester, London or Cambridge address online). We provide a nominee secretarial service for 12 months. Including the filing of the accounts and annual returns. We provide a company nominee director service for 12 months, £1,000 Authorised Share Capital. Fast 6-8 hours incorporation service, this procedure applies to all or packs with the payment of all government fees. The following documents will be delivered via Royal Mail: Original Laminated Certificate of Incorporation printed on card, Printed bound copy of Memorandum & Articles of Association, First Board Meeting Minutes, Pre-signed, undated resignation letter from Director, General Power of Attorney, Indemnity Letter for General Power of Attorney and Agreement for the provision of nominee service and indemnification of nominees. If you require additional company services such as domain name registration, Apostille legalization, Apostilled Memorandum and Articles, or Apostilled Certificate of Incorporation or telephone/fax forwarding services this package allows you to add all of these services online. | £375.00
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This is our most popular package with UK residents, and includes:
Submission of applications that details company's executive officers (£1,000 authorised shared capital, a minimum of one share may be issued)
A registered office address for 12 months, provided by Coddan
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