Articles of Association: property management company
This "memo and articles" document is for a property management company. The usual arrangement is for the "owners" in fact to be long leaseholders from a company they jointly own. This is that company. The property is usually a block of flats, but could be an estate of houses or a building of any sort.
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About this memorandum and articles of association
This document is for a developer of flats or any other residential structure where he will sell by long leasehold, then hand over the freehold when the last flat is sold. This company will own the freehold. Each long leaseholder of a flat will hold one share in the company. The leaseholders will run the company themselves.
The so called model articles will not suit this situation. Each flat owner will want to be sure that his share of the freehold is safe, that repairs will be done as required, that he will not be overcharged for any work, that his view or position will not be ignored, and so on. Built on the draftsman’s experience of difficulties dealing with a powerful chairman, these articles have a constant emphasis on preserving the democracy of the flats management.
Nonetheless, some housing developments may be too large for an entirely democratic approach. These articles also allow for a situation where the shareholders appoint the directors without necessarily each of them having the right to be a director.
As with all Net Lawman documents, the drafting notes are immensely valuable. We give you comments and suggestions on every “article”. This way you may easily edit this document to your precise requirement.
The articles you buy now, in this document:
- are suitable for incorporating a new company or for changing an existing company.
- are specific for a structure where each owner holds one share.
- include obligation to transfer the share at the time of transfer the interest in the property.
- contain modern provisions in plain English.
- allow you to construct your memorandum and articles of association to suit your exact business needs.
- are full of practical and commercial help and suggestions.
- include draft minutes of directors' and members' general meeting to change the articles. (Free bonuses from Net Lawman).
Use a shareholders’ agreement too
The articles of association are only part of the story of your company management. They are a framework within which the company must be managed. They can be changed - but only with the consent of at least 75% of the shareholders (or more, as we have drawn in this set of articles)
Within that framework, you need to set the rules for the detailed relationships between directors and shareholders. You want to be able to leave your articles alone but still change who does what, when someone wants to sell his shares or a new director is appointed.
A shareholders’ agreement lies, so to speak, on top of the company articles. Just by discussing the matters you should have in a shareholders agreement, you will find many areas you are glad to have considered. The more points are agreed - the fewer are left for disagreement. All of that detailed control is best exercised through a shareholders agreement.
Alternative versions of company articles
Of course, not everyone wants to run his, her, or their company in the same way. To avoid having to change your articles frequently, it is also sensible to draw them in ways that suit how your company might be operated in the next few years, not just what you need today. Therefore, we offer various alternatives - each covering different scenario, creates a unique structure.
Articles of Association: limited company (ltd) by shares is suitable for a company with shareholders in control with several directors and possibly some shareholders who are not directors. This is the “plain vanilla” version which most companies will choose.
Mostly property management companies are limited by shares. However, if you want to create a structure (limited by guarantee) you will require articles for a company limited by guarantee.
This document was written by a solicitor for Net Lawman. It complies with current English law.
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