« back Management Companies
 

01 What is a Management Company?

A so called "management company" is a company registered in the CRO usually as a Company limited by Guarantee (CLG) or a Designated Activity Company (DAC),  with an object clause to manage a multi-unit development. The "management company" owns the common areas of the development such as: car parks, green space, stairwells, lifts and communal hallways and maintains them for the benefit of all property owners and typically provides for insurance cover.

On acquiring a unit within the development, in addition to the apartment or house such person also shares ownership of the common areas. Stemming from this, it is usually a condition of the purchaser's contract that they sign a co-ownership agreement which obliged them to become a member of the management company.    These co-ownership agreements are essentially rooted in the laws of contract and private property,  rather than in any particular Act of the Oireachtas.  Following on from this, it should be clear that the requirement to become a member of a management company is not a requirement under company law. 

There is no special body of company law which applies only to so called "management companies" or is applied differently so far as management companies are concerned.  The "FAQ" (Frequently Asked Questions) section of this website answers most general company law type questions in relation to all companies.  Most of the issues arising in the so called "management companies" are not company law issues and the ODCE cannot assist.   The attached document lists the breaches of company law where ODCE can assist with.

02 Are management companies a product of company law?

No. It is important to stress that management companies have no special meaning and are in no way a requirement of company law. There is nothing in the Companies Act which states that a management company must be brought into existence in connection with any multi-unit development, and some multi-unit developments exist which do not have a management company associated with them. Furthermore, it is important to point out and emphasise that there is no special body of company law that applies solely to management companies.

03 Where can I find the legal source from which management companies operate?

The High Court decided not to disqualify a company director.

08 March 2010


High Court Proceedings 

Monday, 8th of March 2010 

The High Court decided not to disqualify a company director in respect of a company that had liabilities at the time of it being involuntarily struck off the Register of Companies. The Director of Corporate Enforcement had sought the disqualification. As an Order was not made in this instance, the respondent and case details are not being published 

Venue: 
High Court, Dublin. 

Judge: 
Justice Mary Finlay Geoghegan 

The Application: 
Under Section 160(2)(h) of the Companies Act 1990 (as amended by section 42(b) of the Company Law Enforcement Act 2001), the Director may seek the disqualification of the directors of a company, which has been involuntarily struck off the Register of Companies pursuant to Section 12 of the Companies (Amendment) Act 1982. 

Under Section 160(3A), directors may successfully defend such an application for disqualification by demonstrating to the High Court that the company had no liabilities at the time of involuntary strike-off or that any such liabilities were discharged before the date of the making of the disqualification application. Where it deems that a sanction is appropriate, the Court has discretion to either disqualify the director for such period as it deems fit or restrict him or her for a five year period. 

Outcome: 
On the 8th March 2010, the Director of Corporate Enforcement sought the disqualification of a company director in respect of a company that had liabilities at the time of it being involuntarily struck off the Register of Companies. The High Court determined that the requested Order should not be made. The Court concluded that the passage of time since the dissolution of the Company and the person’s subsequent tax compliance in respect of a second company indicated that the protection of the future creditors did not warrant the disqualification of the person. The Court made no Order as to costs.

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Telephone: +353 1 858 5800
Email: info@odce.ie