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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 endorses the principle of Auditor independence as enshrined in Section 187 of the Companies Act, 1990.

19 November 2002


The High Court endorses the principle of Auditor independence as enshrined in Section 187 of the Companies Act, 1990. 

The issue arose in a District Court prosecution pursued by the Director where it was alleged that an accused had acted as auditor of two companies at a time when he was a director of each of those companies contrary to section 187. A similar case was taken against the auditor's audit partners arising from the audit firm acting as auditors of the company concerned at a time when the auditor was an officer of that company. 

The District Court judge dismissed the charges against the auditor and his partners on various grounds. This led the Director to seek, by way of Case Stated, the opinion of the High Court on three questions, viz: 

 

  • if the judge was correct in deciding on the evidence before him that the auditor had no case to answer concerning the charge;
  • if the judge was correct in deciding on the evidence before him that the auditor's partners had no case to answer;
  • if the judge was correct in determining that having regard to the dictates of justice, that all of the accused had no case to answer. 

In response to each of the three questions, the High Court answered in the negative. In particular, the judge held that he was satisfied that the judge of the District Court erred in law in concluding that it was necessary to establish “mens rea” in the context of the charges against the respondents. It was further held that the issue is not one of who is appointed as auditors of the companies in question but rather whether any person acted as auditor when disqualified to so act. Following this decision of the High Court, the District Court determined the outcome of the prosecution case on the 1st May 2003.

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