Developer removing the Board of Directors of the Management company

[golfer99]

I am currently a director of the Mangement Company where I live. Recently I received a notice from the developer who is also a director calling an EGM to remove the current board and replace them with other directors of the developer company.

He can do this as he has the majority shareholding in the Management company and the common areas have not been handed over. The current board have threatened legal action against the developer as there is quite a lot things that need to happen before the common areas are vested.

Has this ever happened to any other Board of a management company ??

 

[RonanC]

You need to first check the Memorandum and Articles of association to see what they say about the removal of directors.

What type of company is it? Is it a Private Company Limited by shares or a Guarantee Company without a Share Capital (most management companies are set up this way)

 

[Butter]

The developer may have "golden shares" which can outweigh the votes of residents. The details will be in the Memo & Articles of Association of your management company.
I'd be concerned about why he wants to vote the current directors off and vote on the other directors of the developer's company.
Is he concerned that you are not doing a good job or is he keen to gain control of the company accounts? Do you have a sinking fund? Has he given you any indication of why he wants to do this?