can directors of management companies profit from the company

[rubberband]

just wondering, can directors of a management company make any money out of it if they are seen to be doing some jobs for it(the management company) such as gardening, cutting grass and fixing small repairs.our agm is coming up soon and its a question i would like to know about.

 

[Yorrick]

I don't believe there is any difficulty there once it is above board, approved by the Management Comapany and correct invoicing and payments are recorded for the company records.

Where the difficulty often arises is that the Directors may own for example a landscaping operation and they get them to do the landscaping without following the normal process of getting competitive tenders etc or alternatively they are getting backhanders from firms given work by the Management Company.

Of course in many cases, despite 450000 unemployment, it is difficult to get someone to tutn up and do messy little jobs. n this situation if a Director does the job I dont see why he should not be paid for it.

 

[DianeC401]

As Yorrick says, in practical terms there are probably instances where Directors end up doing work for the Management Company as it's easier and sometimes cheaper than getting another supplier to do the work.

However, I do think unless it's properly handled, it runs the risk of being a conflict of interest.

In our Management Company, where it has been the case that we had to pay a Director for work, the invoices have been brought to the larger residents committee, discussed and authorised by a vote, without that person being present, in order to be transparent, independent and accountable.