Ashworths are co-sponsoring the Wimbledon Guild’s Waggy Walk
On Saturday 5 October 2024 why not join Ashworths (and our four-legged colleague, Dhansak) at the Waggy Walk organised by the Wimbledon Guild? The Guild is a fantastic local charity that…
Joint Ownership in the name of a Company
Very often, leaseholders who wish to buy their freehold will set up a company who will act as the nominated purchaser in the collective enfranchisement proceedings and will on completion be the registered owner of the freehold interest.
The company will be owned by the leaseholders who participate in the collective enfranchisement claim and they will be the shareholders and directors of the company.
The company can be limited by shares in which case each participating leaseholder will be a shareholder or limited by guarantee (and will have no share capital) in which case each participating leaseholder will be a member of the company.
The advantage of acquiring the freehold in the name of a company is that when a flat in the building is sold there is no need to transfer the ownership of the freehold. The person selling their flat will simply transfer their share in the company to the new buyer and the new buyer will become a shareholder in the company. This is a less onerous administrative exercise than transferring the owenrship of the freehold interest
The disavantages of acquiring the freehold in the name of a company are:-
- Company Returns and Accounts – Legislation governing the operation of companies requires annual accounts and returns to be submitted to Companies House each year. This is a strict requirement and failure to submit the necessary returns will result in the company being struck off the Company Register. If that happens any property vested in the company is vested in the Crown. The freehold interest would then form part of the Crown estate and you as leaseholders would lose ownership of the freehold title.
- Administration – Because of the nature of the documentation required to be provided to Companies House it is very likely that you will need to appoint an accountant to deal with these administration issues for you. They will of course charge for engaging their services.
It is very easy to set up a company and ‘off the shelf’ companies can be bought from Companies House for as little as £150.00. They will have Memorandum and Articles of Association tailored towards freehold ownership and so a company can be set up quite easily. You will need to appoint some or all of you as Company Directors and one of you as a Company Secretary.
We can help you with setting up a company to acquire your freehold and can also recommend local accountants who can offer a full service from setting up the company to preparing annual accounts and filing company returns.