Right to Manage Company Formation
Register an RTM company to manage your building.
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What is a Right to Manage Company?
A Right to Manage (RTM) company is a type of limited by guarantee company. It is used by leaseholder owners of individual residential units to take over the management of the whole building from the landlord. The Commonhold and Leasehold Reform Act grants leaseholders the legal right to do so without needing permission or proving mismanagement.
- Property qualification: The building must comprise a minimum of two flats, excluding leasehold houses which are ineligible.
- Leasehold criteria: A minimum of two-thirds of the flats within the building must be leasehold, and these leases should have originally been granted for a period exceeding 21 years.
- Residential composition: At least 75% of the building must be dedicated to residential use. If there are commercial spaces like shops or offices, they should not exceed 25% of the total floor area, excluding common areas.
- Non-residence clause: In cases where the building is not a purpose-built block and consists of four or fewer flats, the landlord or an adult family member must not have permanently resided in one of the flats for at least 12 months.
- RTM company formation: Any number of leaseholders can establish an RTM company. However, the company is not empowered to take over management until a minimum of 50% of the flats within the building agree to become members of the company.
- Estate considerations: The Right to Manage applies specifically to individual buildings. In an estate with separate blocks, each block must qualify independently and submit its own individual RTM 'notice of claim.' Nonetheless, a single RTM company is permitted to manage multiple qualifying properties within an estate.
RTM company formation involves specific procedures, with the entity having the option to manage the building directly or appoint a third-party managing agent. You can learn more about RTM companies through our guide.
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Frequently asked questions
If you purchase this package, we will help you register a private company limited by guarantee that is appropriate for use as a Right to Manage (RTM) company.
A Right to Manage company allows leaseholders in a residential property (normally flats) to come together and take over the management of the building from the landlord.
Leaseholders do not require the permission of the landlord to set up a Right to Manage company. Landlords are, however, entitled to become voting members in the company.
Whilst it is possible for a Right to Manage company to be formed with just one person (who would be the director, guarantor and person with significant control), because of the nature of the business (leaseholders joining together to manage a property) - it’s unlikely that this type of company would be registered and operated by one person.
Yes. For an RTM company to operate, all of the below criteria must be met:
- The building that is to be managed must have at least two flats
- A minimum of two-thirds of the flats should be leasehold
- A minimum of 75% of the building should be residential
- If the flats aren’t purpose-built and the building contains four flats or fewer, the landlord (or an adult member of their family) should not have resided in any flat in the building for at least 12 months
- A minimum of 50% of the leaseholders in the building must agree to become members of the company
An RTM company is owned by its guarantor(s), and it should be operating on a not-for-profit basis.
Yes absolutely. Please call our Customer Service Team on 020 3908 0044 and one of company experts will process your company formation order with you by telephone.
Forming a limited company is a simple online process; however, before starting the process you will need the following information to hand: the company name, registered office address, directors’ details, company secretary details, the shareholder details, and how many shares you want to issue.
For further reading, please have a look at our resource page: Information Required to Register a Company, which provides a useful company formation checklist.
It will take you no more than 5 to 10 minutes to complete the online company application form on our website. Companies House will then usually take 3 to 6 working hours to approve your new company registration. Please note this is subject to Companies House workload on the day and it can take up to 24 hours.
If it is very important your company is incorporated as soon as possible, we would recommend you add the Guaranteed Same-Day Service to your order.
A SIC code or Standard Industrial Classification code is used to categorise a company's business activity. To register a limited company or LLP you must choose at least one SIC code, although you can choose up to four. Do not worry if you do not know the SIC code relevant to your business activity, Quality Company Formations provide a simple SIC code search tool where you can choose your SIC code or codes.
As soon as your new company has been registered at Companies House, we will send you an order fulfilled email. Within this email you will receive a voucher code and instructions on how to set up your new domain using the 'names.co.uk' website.
All company formation agents have a legal obligation to check Proof of ID and Address; however, most customers do not need to do anything, as we carry out digital checks using the information supplied in your online company application form.
Those customers who require to provide ID can do so in a matter of minutes using their mobile phone and a simple App which we will provide. This App is supplied free of charge.
It is a simple process to close a limited company. Quality Company Formations offer a Company Dissolution Service for just £69.99 +VAT. This cost includes the Companies House fee, filing the DS01 form and providing the Board Resolution to approve the dissolution of the company.
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