Management Companies Set Up and Articles of Association

Residents’ management companies exist to look after shared parts of a development, not to trade for profit, and that difference matters at every stage: when the company’s incorporated, and when its articles of association are drafted. We advise developers, freeholders, managing agents and residents on setting these up, transferring control, and getting the governance right.

What is a residents’ management company?

A residents’ management company (RMC) owns, manages or oversees the shared parts of a residential development: communal gardens, private roads, hallways, building structures and similar. They’re commonly owned and controlled by the leaseholders or homeowners living there, which gives residents a direct say in how their building is looked after, including decisions on service charges and maintenance.

Setting one up

Getting an RMC right at the outset matters. We can incorporate the company, prepare its constitutional documents, advise on directors’ duties, and make sure the ownership and management structure lines up with the leases, transfer documents and any lender requirements. Careful drafting early on reduces the risk of governance disputes, service charge issues and administrative headaches later.

We regularly work alongside our Commercial Real Estate colleagues where new developments require an RMC, and with conveyancers handling a property transaction that may require a transfer of membership in an RMC, so the company arrangements match the development documents and the practical needs of everyone involved.

How we can help:

• incorporating new residents’ management companies
• preparing bespoke articles of association
• reviewing existing constitutional documents
• advising on membership and director provisions
• supporting transfers of control
• providing company secretarial support
• working alongside our property colleagues on wider development and conveyancing transactions

Articles of association

An RMC’s articles of association need to do a different job to a standard trading company’s. A trading company’s articles are usually built around commercial activity and distributing profit to shareholders and transfers of shares; whereas an RMC exists to manage property, not to trade. Its articles need to reflect that.

That typically means provisions covering what happens to membership when a property is sold, insurance provisions, restrictions so only qualifying residents can be members, rules keeping membership tied to ownership, specific arrangements for appointing and retiring directors, and mechanisms that keep control with the residents themselves. In a mixed development, where different property types carry different service charge obligations, bespoke provisions may also be needed to mirror what’s already set out in the leases or transfer deeds.

We tailor the articles and the wider company structure to the development itself, so the RMC works properly, meets its legal obligations, and gives everyone a clear framework for managing the building long term.

Why this matters

Well-drafted documents make for clearer governance, smoother sales and transfers, and a lower risk of disputes down the line. That matters most where a development has shared facilities, a mix of property types, phased construction, or different service charge arrangements between residents.

An RMC’s purpose is managing the building, not turning a profit, and its articles need to say so.