Tuesday 20 October 2009

UK: England and Wales: the RTM Companies (Model Articles) (England) Regulations 2009

The RTM Companies (Model Articles) (England) Regulations 2009 were laid before Parliament yesterday and come into force on 9 November 2009. A copy of the Regulations is available on OPSI: see here (html) and here (pdf). In the accompanying explanatory memorandum (pdf) the following background information is provided: 

The Commonhold and Leasehold Reform Act 2002 s 73 and s 74 provided for the establishment of RTM [right to manage] companies. These are private companies limited by guarantee enabling long leaseholders in blocks of flats to take over the management of their building irrespective of any fault on the part of their landlord. Leaseholders must form a company to exercise the management functions.

The [Companies] 2006 Act introduced changes to the required constitutional documents of companies. It abolished the requirement for companies to have a separate memorandum of association and for companies to specify their objects. Objects formerly set out the purpose for which the company was created. It has been decided to keep objects for RTM companies as they should be restricted to RTM functions only.

All RTM companies are private companies limited by guarantee. Their memorandum and articles are currently prescribed by the RTM Companies (Memorandum and Articles of Association) (England) Regulations 2003 (SI 2003/2120.) The new regulations revoke this instrument, subject to transitional provisions which enable RTM companies incorporated before 9 November 2009 to use the old articles until 30 September 2010. Such companies are free to adopt the new articles before this date if they choose".

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