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A Management Company by Guarantee is a Limited company formed for the purpose of management of a Specific Property that has been divided into separate areas. i.e flats.
For example the leaseholders / tenants of the property would form a Management by Guarantee company to pool funds for the maintenance costs of the communal areas of the building or to pool costs for long term projects such as roof repairs.
Or for example, the owners of the property may wish to set up a Management by Guarantee for managing the maintenance costs of the property on behalf of the tenants. Any monies leftover would go back into the company to cover any future maintenance costs.
The difference between the Management by Shares and the Management by Guarantee is that there are no shareholders. This means no one person can benefit from any profits or any monies left over after maintenance and overheads have been deducted. If any monies do remain they can be designated to a charity or charities agreed by the members or as the Management company by Guarantee is a not for profit organisation themselves they can channel the remaining monies back into the property or charity to help fund their aims and objectives listed in their memorandum and articles which usually covers the funding for maintenance. The company has members and if the property is split between different owners or parties/tenants these parties will be members of the Management by Guarantee.
The examples given above are just a few situations where a Management by Guarantee company may be useful. If your situation is not reflected here and you need any further help please do not hesitate to contact us.