Each Irish company is required to maintain certain registers and other documents under the Companies Act 2014 among them a register of its members. Corporate Governance partner, Nicholas Metcalfe looks at how this may present particular challenges for owners’ management companies given the provisions on their membership under the Multi-Unit Developments Act 2011.
Register of members
Every company in Ireland is required to keep certain registers, books and documents and is obliged to make these available to its members and to members of the public. These registers and records must be kept either at the company’s registered office or at another place within the State, which may be the company’s principal place of business.
One of the most important registers required to be kept is the register of members. This must contain the names and addresses of the members and, where the company has a share capital, details of the shares owned by each member as well as the dates on which the member was entered into the register and when he or she ceased to be a member.
Where the company is a company limited by guarantee, as many owners’ management companies (OMCs) are, the register need only record the name and address of each member and the dates on which the member was entered into the register and when he or she ceased to be a member.
Companies are obliged to make changes to the register of members within 28 days of the company agreeing to or, if the Company did not agree to it, becoming aware of any change.
Failure to do so is an offence. It is therefore important that directors of companies are aware of their company’s members and of changes to that membership.
The Multi-Unit Developments Act 2011 and OMCs
The Multi-Unit Developments Act 2011 provides that membership of an OMC transfers automatically on the transfer of the ownership of a unit at the development managed by the OMC. This means that the board of an OMC will not necessarily be aware of a change in ownership as promptly as directors in companies limited by shares, where there is a requirement to present share transfers for registration. As a result, OMCs’ registers of members may not always be as up to date as those of other companies.
As noted above, it is an offence for a company not to update its register of members within 28 days of certain events. Additionally, it is important for a company to be able to rely on the content of its register of members to enable it to convene its annual general meeting and, in the case of an OMC, to levy its service charges and sinking funds effectively.
Access to and inspection registers of members
Every company’s register of members is open to inspection by any member of the company without charge. Any other person may also inspect the register of members of a company or request a copy of those registers on, in either case, the payment of a fee.
Conclusion
Maintaining registers of members is an important part of an OMC’s corporate governance. The register provides a historical and current record of the OMC’s ownership. This information is essential for the effective collection of service charge and sinking fund contributions and may be requested by others. Failure to keep statutory registers is an offence that can lead to penalties not only on the OMC but also on its officers.
For expert legal guidance on post incorporation obligations, please contact a member of our Corporate Governance & Compliance team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
