Can directors of a management co take fees for work done?

paulpd

Can the directors of an apartment management company take some fees for work they have done for the current year? (Assuming it's agreed with the members)

If yes, in terms of compliance, what needs to be done? Do they need to record the minutes of a meeting that agreed the directors fees? Do they as directors invoice in management company?

Thanks a lot

markpb

It depends on the company documents used when the company was formed. Download the memorandum and articles of association for your OMC from the CRO website and see if they place any restriction on dictors being paid fees.

paulpd

markpb wrote: »

It depends on the company documents used when the company was formed. Download the memorandum and articles of association for your OMC from the CRO website and see if they place any restriction on dictors being paid fees.

Thanks for the reply.

Assuming there is no restriction, is there any special compliance or governence that needs to be followed, or can the directors simply invoice the company for their work in the same way as the landscaper or other service provider would?

Thanks

kkelliher

I have never seen any director of a management company charge for their time as they are generally owners in the relevant complex. I would doubt if the rules of the company would allow for such charges outside of possible expenses in operation fo the role.

paulpd

kkelliher wrote: »

I have never seen any director of a management company charge for their time as they are generally owners in the relevant complex. I would doubt if the rules of the company would allow for such charges outside of possible expenses in operation fo the role.

I think what has happened is that the members were very unhappy with the managing agents and so two of the directors have taken it apon themselves to manage the complex themselves for now. They do the bookkeeping, chase outstanding service charges, and have appointed new landscapers etc. Basically they do all of the work of the previous managing agent and it has worked out very well. The members are happy to pay them when it was suggested at a recent meeting. One of the directors has asked me how they should go about charging. They put between 4 or 5 and sometimes up to 10 hours per week into it.

kkelliher

paulpd wrote: »

I think what has happened is that the members were very unhappy with the managing agents and so two of the directors have taken it apon themselves to manage the complex themselves for now. They do the bookkeeping, chase outstanding service charges, and have appointed new landscapers etc. Basically they do all of the work of the previous managing agent and it has worked out very well. The members are happy to pay them when it was suggested at a recent meeting. One of the directors has asked me how they should go about charging. They put between 4 or 5 and sometimes up to 10 hours per week into it.

That makes a difference in fairness. They are acting as the managing agents. I would think they would be required to resign as directors of the management company as there would be a conflict of interest in their roles. they would generally propose a fee to the management company at the start of every year as part of the budget and invoice accordingly on generally a quarterly basis.

I would take it that for the initial period they should agree something with the other members of the management company committee but I cannot see how they can continue as directors.

paulpd

kkelliher wrote: »

That makes a difference in fairness. They are acting as the managing agents. I would think they would be required to resign as directors of the management company as there would be a conflict of interest in their roles. they would generally propose a fee to the management company at the start of every year as part of the budget and invoice accordingly on generally a quarterly basis.

I would take it that for the initial period they should agree something with the other members of the management company committee but I cannot see how they can continue as directors.

Thanks for that. Conflict of interest maybe an issue for sure, certainly under company law / ethical guidlines. Seems to be a little more complicated than it looks!

Thanks again

Lantus

You need to check your articles of association which you can obtain of the CRO for 3.50 I think.

It is usualy very normal for them to explicitly state that directors cannot be paid in any way whatsoever from the company or members. In other words its a voluntary role.

There is nothing to stop a director undertaking the 'role' of an agent and its a great way for the development to save money if members have the time and ability and willingness to invest in the process.

Paying themselves though, unless your AofA permits it is a no no however you might think it can be done.

IF they thought that would like to become agents instead they can, although they would not nomrally hold director positions as well. To become agents they need to set up a seperate company and register and pay the fees which vary but can be upto 10k a year to hold a license to operate as an agent. Details on the psr.ie website.

I would suggest that the directors co-opt some more directors onto the board to spread the work load out.

Its a labour of love!