You can set up a limited company - sometimes called a Right to Manage or flat management company - so residents can jointly run a property, eg a block of flats.
Set up the limited company
You must follow the normal process for setting up a private limited company.
The Leasehold Advisory Service has detailed advice on setting up a company to manage property, including dealing with the landlord.
Running the limited company
All the residents who have agreed to be directors will have legal responsibilities.
You must also send Companies House:
Tax for the limited company
You must send a Company Tax Return to HM Revenue & Customs (HMRC) no later than 12 months after the end of the company’s first financial year.
After you do this, HMRC may decide to treat your company as ‘dormant’ - this means that they wouldn’t expect your company to send Company Tax Returns for later years.
They may do this if your company does none of the following:
- allow directors who aren’t residents or leaseholders to be appointed in its articles of association
- does more than manage the property in the interests of shareholders
- make a profit
- need to pay more than £100 in Corporation Tax in a year
- get any income from land
- pay dividends or other payments from profits to shareholders
- own any assets it is likely to dispose of which would give rise to a chargeable gain
- make payments that need to be taxed
They will write to the company if they decide to treat it as dormant.
When the company must always send a Company Tax Return
Your company must send a Company Tax Return every year if:
HMRC doesn’t write to confirm they think the company is dormant
- the company starts doing any of the things in the list above, even if HMRC has previously said the company is dormant