A management company is an organization that is hired to trust in any property. The property most often acts as a house, cash and even large enterprises. Such a management system differs from direct control when the owner makes all decisions and is responsible for them. The management company often does not bear any responsibility, or bears, but to a limited extent. Therefore, before contacting such an organization, you should study the features of this method of management.
What is
A management company is a specialized institution that performs management functions in various fields of economic activity. In Russia, this concept often means companies engaged in management in the housing and communal services system. In economic theory, this term has a broader concept. In entrepreneurial activity, management companies are management companies that are not related to the provision of housing and communal services - and this is very common.
One of the peculiarities of such companies is that they can be created in one of the enterprises form existing in the Russian legislation. The choice of one form or another depends on the size and scope of the company. So, in the field of housing and communal services management companies are often created in the form of LLC or in the form of a partnership of owners. In the first version (LLC), management is carried out by a specialized organization, in the second - by the owners themselves.
Types of Management Companies
Regardless of whether it is a PJSC, partnership or LLC, management companies are classified by field of activity, form of enterprise, size and composition of participants. So, the following types of management companies operating in Russia are distinguished:
- building maintenance companies;
- mutual funds, trust management of investor assets;
- management company providing management services for firms and enterprises.
The most widely used companies are housing and communal services. This is understandable, because there are much fewer enterprises in the country than residential multi-apartment buildings. Other types of management companies are companies that offer appropriate services to businessmen and investors. Their main task is to manage the assets of their customers.
Housing and utility companies
They are engaged in the maintenance and repair of residential apartment buildings. Perform important tasks such as:
- improvement of adjacent territories;
- collection of payments from residents of the house and payment of utilities;
- hiring workers for construction and repair work;
- inform about changes in tariffs;
- cleaning and repair of porches.
The management companies of the district act as an intermediary between utilities and residents of the serviced house or houses located in a particular area.
State regulation of housing and communal services management companies
In accordance with the Housing Code of the Russian Federation, the management company must be not only self-sufficient, but also profitable. That is, it exists only on funds received from residents, as well as from other types of entrepreneurial activity not prohibited by law. For example, renting out some premises or providing space for advertising.
Received money goes to home improvement.But even the means of residents and income from renting a place for rent or for advertising may not be enough to service it. Most of the housing stock of the Russian Federation is in a sad situation. Many houses no longer make sense to repair, and there is nowhere to resettle tenants. But people continue to live in such houses and pay for services. The management company is not always to blame for this. This may also occur because before that no one had managed the apartment building, or it was managing inefficiently, or the money received was simply stolen.
Responsibilities of housing and utilities management companies
Responsibilities and rights of management companies - carrying out activities to maintain the building through payments made by those living in this building. It includes:
- Regular inspection and repair of the building: roofs, elevators, porches. To do this, appropriate specialists should work in the company’s staff or contracts should be drawn up with other companies providing the services of such specialists.
- Cleaning of roofs, premises and territories adjacent to the building.
- Ensuring fire safety of the building. That is, this includes paying for the services of inspection departments, installing and maintaining fire safety, and buying fire extinguishers.
- Providing access to utilities for all residents of the serviced building.
- Informing about the size of tariffs and terms of payment, fundraising for utility bills.
- Report on the work done to its customers: where, for what purpose and to what extent the funds were spent or planned to be spent.
- Preparation and holding of a meeting of tenants.
- Search for sources of additional income. For example, the rental of premises, advertising space;
- Depreciation on a building.
Management companies in Moscow, St. Petersburg or any other city can also carry out construction work. For example, the construction of an attic or another floor. But they have the right to carry out such events only with the full consent of all owners and only after issuing permission to make changes to the building’s construction from the relevant government department.
Forms of enterprises of management companies
Regardless of the area in which the management companies operate, they can be organized in the form of a PJSC, LLC or partnership. In the form of PJSC and LLC, there are companies that engage in investment activities or provide management services to private entrepreneurs, firms, and enterprises. Also in the form of LLC is managed by a management company for housing and communal services. In the first case - the tenants hire a third-party company, in the second (partnership) - they are engaged in management activities themselves.
Disadvantages of managing housing and utilities management companies
The management company is only liable to its customers, to whom it must report annually to the general meeting of tenants. Theoretically, this should happen throughout the territory of the Russian Federation, in practice, the situation is somewhat different. In reality, it is very difficult to gather all the residents in one day. In addition, many heads of such enterprises are in no hurry to report to the residents, since it is not beneficial for them.
Most of the housing stock in Russia is in a dilapidated state, therefore, in large cities, receiving large sums, company managers do not invest the funds they receive in buildings, but prefer to spend them on their own needs. For example, management companies in Moscow and other large cities often behave this way. The problem with housing companies in the housing sector has existed since the law on management companies was passed, and problems with fraud in this area have not been resolved.
How to change the housing and utilities management company
If the management company does not fulfill its obligations, does not meet the requirements of customers, then they have the right to terminate the contract with her and enter into a new one, but with another company or to organize a partnership of homeowners.
Theoretically, in order to terminate the contract, it is enough to submit a statement to the management company or court with the signatures of all or almost all of the owners and a package of documents. The contract must be terminated within two weeks.
In practice, the situation is completely different.A lot of money is being spent in the housing and utilities sector, and therefore there are too many unscrupulous managers working there, who, using loopholes in the laws, due to excessive tariffs and almost complete absence of costs for maintenance and home repairs, receive extra profits. However, they do not seek to leave a profitable occupation. Sometimes it happens that the head of an LLC manages a management company even with a court order to revoke a business permit and continues to work.
Investment Management Companies
Investment management companies are organizations engaged in the trust management of investor capital. The essence of this management is that investors buy either shares in the investment portfolio already created by specialists, or instruct a specially hired professional trader to acquire the relevant securities.
Using an investment management company has its pros and cons. The advantages include the fact that all trading operations, market analysis and transactions, will be done by a person who has extensive experience and a sufficiently high level of competence in this field of activity. This can reduce risk and save time. The disadvantage of such companies is that they charge a high percentage of the commission. In addition, no one gives a 100% guarantee that the invested funds will remain safe and sound or income will be received from them.
Responsibilities of Investment Management Companies
It is the responsibility of the head of the LLC to manage the management company. She must publish annual and quarterly reports on her work, as well as any information regarding customer accounts. The main responsibility is to try to maintain and increase the capital of customers, to ensure stable growth of their assets.
How to choose an investment management company
When choosing, you should pay attention to the experience of the company, reviews about it, financial performance. Particular attention should be paid to the presence / absence of an audit report and its contents attached to the financial statements. Typically, capital management services are offered by large banks and investment funds. The main condition when choosing a management company is that its life on the market is at least 10 years.
Management companies for enterprises and firms
There are two types of such management companies. Either a separate company is hired, or there is a department of the enterprise that performs this function.
In the first case, the owner hires an external company, in the second case, management is located in one of the departments of the enterprise in the form of a PJSC or LLC, from where it manages. The management company, in fact, is the center from which the entire network of enterprises is managed. For example, Coca-Cola has sugary soda plants around the world, but it is managed from a U.S. headquarters. It is here that decisions are made about what, when and how to produce. Plans to expand production are being created. All accounting information from all enterprises also flocks here for analysis and development of management decisions.
The managers of the second type are resorted to in rare cases, and such a measure is considered forced. The services of such companies are resorted to in cases where the enterprise is in crisis or when the owner is forced to dismiss the manager (or he resigned himself), but there is no way to replace him immediately. Enterprises need external management and this quality management should be higher than internal.
Advantages and disadvantages of managers
External enterprise management or management from one remote center has its advantages and disadvantages.On the one hand, highly qualified specialists work in such management companies, on the other hand, these specialists cannot always determine what is needed to solve a problem. They are not at the enterprise, have not been working at it for quite a long time, and on the basis of one financial statement, it is not so easy to determine the cause of the crisis and find a way out of it.
One of the most significant shortcomings of management companies operating in the enterprise is that decisions are made late. Such management can be effective only in two cases: when the company is just opening or is already at the stage of bankruptcy.
In the first case, the management company creates a management system, according to which the enterprise will operate. In this case, the management company is an example of how the enterprise should be managed in the future. In the second, the work of the management company is reduced only to finding funds to cover current debts and only then to the development of the enterprise. At the same time, they must work together with the owner to save the enterprise.
Except for these two cases, the services of management companies will only lead to undesirable costs, lower quality and speed of decisions.
Management companies play an important role in the process of managing enterprises engaged not only in the field of housing and communal services, but also in other areas of entrepreneurial activity. Despite the flaws, in some cases, hiring a management company is the only way to improve the situation.