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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 Director of Corporate Enforcement v McGovern Worn & Co.

03 February 2006

Details of Defendants: 
Edward McGovern
Kiltrough
Beabeg
Drogheda
Co. Louth 

Michael Sean Scott
16 Headford,
Mount Avenue
Dundalk
Co. Louth

Sean Connell
Sheetland Road
Termonfeckin
Co. Louth 

Paul McCashin
1 The Drive
Riverbank
Drogheda
Co. Louth 

Venue: 
Drogheda District Court 

Judge: 
District Judge Brennan 

Alleged Offence(s): 
(1) The defendants, trading under the name and style of McGovern Worn & Co., were charged with acting as auditors of Macushla Property Developments Limited for the financial year ended 31st December 2000, whilst disqualified pursuant to Section 187 of the Companies Act 1990, contrary to Section 187(6) and 187 (9) of the Companies Act 1990. 

(2) The defendants, trading under the name and style of McGovern Worn & Co., were charged with acting as auditors of McGovern Consulting Limited for the financial year ended 30th April 2000, whilst disqualified pursuant to Section187 of the Companies Act1990, contrary to Section 187(6) and 187 (9) of the Companies Act 1990. 

(3) The defendants, trading under the name and style of McGovern Worn & Co., were charged with acting as auditors of Idem Developments LimitedA for the financial year ended 31st December 2001, whilst disqualified pursuant to Section 187 of the Companies Act 1990, contrary to Section 187(6) and 187 (9) of the Companies Act 1990. 

Outcome: 
On a plea of guilty entered by the defendants, the Court, having thought the case proven proceeded (under Section 1(1) of the Probation of Offenders Act, 1907) to dismiss the charges, subject to each defendant making a €1,000 contribution to charity and Acosts of €300 being paid by each defendant to the prosecution.

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Office of the Director of Corporate Enforcement
 16 Parnell Square, Dublin 1
Telephone: +353 1 858 5800
Email: info@odce.ie