Management Companies

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?

Court Rulings

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The Director of Corporate Enforcement V Thomas (otherwise Tom) Colton

Wednesday

22 April 2015


Details of Accused:
Thomas Colton

Address:
20 The Park, St. Wolston’s Abbey, Celbridge, Co Kildare

Venue:
Dublin Metropolitan District Court, Court 8

Judge:
District Judge John O’Neill

Alleged Offences:
Eight alleged offences against the Accused were before the Court arising from him having acted as Auditor to one company and his having produced false audit reports relating to that company.

2 of the 8 alleged offences against the Accused related to his having acted as an Auditor for one company when disqualified from so doing contrary to Section 187(6) and (9) of the Companies Act, 1990.

3 of the 8 alleged offences related to his having, in purported compliance with Section 193 of the Companies Act, 1990, produced a Report from a duly registered audit firm when that Report was false in a material particular because it was not made by that firm, nor was it signed on its behalf and that the Accused did so knowing that the Report was false in a material particular contrary to Section 242(1) of the Companies Act 1990.

Finally, 3 of the 8 alleged offences related to his having acted as a Statutory Auditor when he was not approved to act contrary to Regulation 21 and 23 of the European Communities (Statutory Audits) (Directive 2006/43/EC) Regulation 2010: Statutory Instrument No. 220 of 2010.

Outcome:
On a plea of guilty to three charges, the Court convicted the Defendant of two Charges pursuant to Section 242(1) of the Companies Act 1990 and imposed a six-month prison sentence on each suspended for twelve months.

The Charge of acting as a Statutory Auditor, contrary to Regulation 21 and 23 of the European Communities (Statutory Audits) (Directive 2006/43/EC) Regulation 2010: Statutory Instrument No. 220 of 2010 was taken in to account.

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