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Today's Enigma

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An existing client asked me to look at the accounts of a resident's company, covering the close he lives in.

It is a company limited by guarantee without share capital and "owns the private road with an annual subscription to pay for it's maintance and has approximately £30000 in the bank"

Companies House search reveals dormant accounts being filed with £15 cash @ bank and no other assets shown This situation is the same each year going back to beyond 2011

Not wishing to seem a complete prat to the client. Anyone got ideas as how this can be correct   

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By atleastisoundknowledgable...
19th Nov 2019 12:25

I would guess that the accounts have been prepared. Dr cash Cr OSC £15 and left as dormant (although you say LBG - what’s the credit side of the £15?). The trade/assets/liabilities are held on trust for the residents. It’s an alternative method of accounting for these sorts of companies.

You what to see the service charge accounts, which your client might have access to (is it him that pays the service charge, or is he a tenant?).

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Caroline
By accountantccole
19th Nov 2019 13:07

Agree with Atleast. You've likely got a Trust going on, although I thought it was common for the actual property to be owned by the co

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By bernard michael
19th Nov 2019 14:04

I've asked for a copy of the bank statement to see what the a/c name is.That may give me a clue. However if it is a trust who are trustees as the directors & treasurer change as people move in & out

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Replying to bernard michael:
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By GW
19th Nov 2019 14:21

The company holds the funds on trust for the residents - statutory trust under s.42 Landlord and Tenant Act 1987

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