RTM and Companies Act


Most leaseholders in my experience find the legal stuff boring. They just want to be ‘saved’ or gain control and a chance to spend the service charge (hopefully better than the previous agents). However, the road to hell is paved with lazy intentions. An RTM company (RTMC) is first and foremost a company and a landlord one at that, and such companies must obey the Companies Act 2006 and their own Articles, and of course the terms of the lease. You can only ‘bend’ a rule if you already know it exists.

Model Articles

The constitutional rules of an English RTMC are prescribed in articles of association included in The ’RTM Companies (Model Articles) (England) Regulations 2009‘ (SI 2009/2767). These regulations apply to all RTMCs.

An RTMC has to be incorporated as a private company limited by guarantee: This type of limited company does not have share capital. Its members are guarantors rather than shareholders. Each RTMC member’s liability is limited to a £1 share which they agree to contribute to the company’s assets if it is wound up.

Memorandum of association

The memorandum of association confirms the subscribers’ intention to form a company and become members of that company on formation.

Under CA 2006 the memorandum is a much shorter document because all the constitutional rules of the company are contained in the articles of association. Consequently, the memorandum serves a more limited purpose and once the company has been incorporated, it cannot be amended.

The required memorandum wording is included in the ‘The Companies (Registration) Regulations 2008 (2008/3014)’ and you should use this format when preparing your memorandum.

The prescribed Memorandum and Articles of Association of the RTMC do not include in their wording the requirement for the list of members of the RTMC to be witnessed and dated in the application for incorporation of the Company. This is a requirement of the Companies Act and the Registrar of Companies will return all applications where the necessary witness signature and date are omitted.

The wording of the memorandum is prescribed and it cannot be amended in any way. If you add or change the wording your application will not be accepted:-

Mem of arts

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