Right To Manage Companies


Leaseholders’ rights

Shared ownership is better than no ownership at all, but it can present problems. The Commonhold and Leasehold Reform Act 2002 set out to improve the situation for leaseholders of flats, for whom the problem of partial ownership may become a major concern.

No compensation

The 2002 Act created a new right enabling leaseholders of flats to take over the management of their building without having to prove that the landlord failed or was negligent and without having to pay compensation (other than reimbursing the landlord’s reasonable costs).


Right to Manage Companies

The provisions of the Act are exercised through a Right to Manage (RTM) Company, which is defined as a private company limited by guarantee which includes in its Memorandum of Association the stated object to acquire and exercise the right to manage the premises.


RTM Company Name

A Right to Manage Company usually takes the name of the building that it manages, although another name may be acceptable. However, the company name must end with “RTM Company Limited”.


Directors and Members

The company must always have at least two directors and at least two members, who must be “qualifying tenants” of flats contained in the building that the RTM manages. A qualifying tenant is the holder of a “long lease” (defined as more than 21 years). Once the RTM company takes over, the landlord is also entitled to become a member.


The building

To qualify for a RTM company, the building must be self-contained or at least be capable of being redeveloped independently. The premises may be partly commercial provided the residential parts total at least 75% of the floor area and the flats held by qualifying tenants total no less than two-thirds of the overall number of flats in the building.


Minimum membership

A singe tenant cannot form a RTM company. If there are only two qualifying tenants they must both become members. Where there are more tenants, at least 50% must be members of the company before it can exercise RTM rights.

Statutory Registers

The Company’s statutory registers must written up before serving the Claim Notice.



The rules governing RTM companies were developed through a series of Acts of Parliament of which the latest was the Commonhold and Leasehold Reform Act 2002.


Previous laws, all updated by the 2002 Act were:

  • the Leasehold Reform Act 1967

  • the Landlord and Tenant Act 1987

  • the Leasehold Reform, Housing and Urban Development Act 1993


Property Management

RTM companies are for leaseholders of a property with areas of shared use. They are not suitable for people who own, or intend to own, the freehold of a property or series of properties. For shared ownership of freehold property a more suitable legal instrument is a Property Management Company limited by Shares.


Order Now through Ordered Management

It is important to get the company structure right so it’s best to trust the job to experts. OM stands out among company formation agents because we specialise in the less commonplace formations that demand more care. If you need to discuss matters you can call us on 0117 370 2725. Once you’re ready to go, complete our simple online Order Form.


Order Now

Right To Manage Company Limited by Guarantee


Ordered Management will handle your RTM Company Formation for just £154 (including VAT) and provide the following documents on completion:

  • Incorporation Certificate

  • 2 copies of Memorandum and Articles

  • First Board Minutes

  • Draft Application for new Members

  • Draft Notice Inviting Participation

  • Draft Notice of Claim

Company Maintenance

Every company is obliged to keep a Statutory Register and to inform Companies House of any changes to the ownership or control of the company and any associated details. It is also a legal obligation to submit an Annual Return each year, and a set of Accounts (even if the company is dormant). Failure to fulfil these obligations can lead to heavy penalties and even to the company being struck off the Register and fines imposed on the Directors. Responsibility for these matters traditionally belonged to the Company Secretary. It is no longer a legal obligation for companies to appoint a Secretary but, if they don’t, they must make sure that someone still does the Secretary’s job. To ensure the job is done properly, why not trust it to experts?


To appoint Ordered Management to be your Company Secretary, select the Company Secretary option on the Order Form and leave it to us.