Jordans FAQs: Our right to manage company was incorporated before the Companies Act 2006. Are our articles still valid?

Q: Our right to manage company was incorporated before the Companies Act 2006 came into force.  Are our articles of association still valid?

A: The Commonhold and Leasehold Reform Act 2002 introduced the right to manage and gave long leaseholders the right to join together to take over the management of the premises containing their flats. To exercise this right a company must have memorandum and articles of association that set out the purpose of running the company and are in the form prescribed by law. A company will not be a valid right to manage company (RTM) if it does not have these provisions.

As most of us are aware The Companies Act 2006 (CA06) came into force on 1 October 2009 and replaced the memorandum and articles of association with a single document (the articles of association). Also, through regulations new sets of model articles for different types of companies were introduced.

The CA06 also prescribed the new form and content of articles of association for RTM companies. These are known as ‘The RTM Companies (Model Articles) (England) Regulations 2009’ and revoke The RTM Companies (Memorandum and Articles of Association) (England) Regulations 2003.

There was a transitional period for existing RTM companies to continue operating under their exiting articles until such time as they chose to adopt those prescribed by the regulations. However, if existing RTM companies did not adopt the new articles during the transitional period the new articles prescribed by the regulations automatically applied at the end of the transitional period.

I recommend that you obtain copies of these model articles from the Office of Public Sector Information website (www.opsi.gov.uk) as these are the correct articles for your company and should be used as a replacement for your existing memorandum and articles of association.

About the author: Karina James-Wiltshire LLB, GCILEx is Corporate Legal Executive,
Jordans Corporate Law Limited

 

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