Incorporated Bodies

Company limited by guarantee

For community and voluntary groups wishing to incorporate, the most commonly used structure is as a company limited by guarantee without share capital under the Companies Acts 1963 – 2005. The advantages include limiting the liability of members and allowing the organisation to enter into contracts in its own name.

It is therefore suitable for larger organisations and also any wishing to employ staff, lease property, etc. Disadvantages include the costs associated with forming and maintaining the company and compliance with company legislation, which can be onerous in terms of administration. Company members control the company, but elect officers known as ‘directors’ who govern the company. Liability of members is limited, usually to a token amount of €1 or so. Guidance for setting up and running a company limited by guarantee is available from, amongst others, the Companies Registration Office and the Office of the Director for Corporate Enforcement. Incorporation requires the drawing up of a memorandum and articles of association that lay down the ‘objects’ of the company (its aims) and the rules by which it will work. You may only do what is in your ‘memo and arts’!

There is a standard template in the Companies Act 1963 (Table C), and the Revenue Commissioners have also produced a standard template.

To form a company limited by guarantee, you must:

• Finalise your memorandum and articles of association.
• Have the end of both these documents signed and dated by the first members of your company. These members are known as the ‘subscribers’, and you must have at least seven such members. They must also give their names and occupations (usually referred to as their ‘descriptions’). The signatures must be witnessed, co-signed and dated by someone other than one of the subscribers, together with their address.
• Complete a Companies Registration Office (CRO) A1 form. Carefully read the notes provided with the form and complete the form in black ink. Watch out for the following:
  • ‘Registered office’: the official address of the company to which, for example, CRO notifications can be sent.
  • ‘Secretary’: every company must have a company secretary who is responsible for ensuring that the company complies with its legal requirements, for example, to keep minutes, send in annual returns, etc.
  • ‘Presenter’: the person who is sending in your company application should complete this section.
  • ‘Directors’: each director of the company should complete and sign this section. You must have at least two directors. The directors are usually two or more of the subscribers.
  • ‘Subscribers’: the people who signed your memorandum and articles of association must also sign the A1 form.
  • ‘Company capital etc’: this is not relevant to a company limited by guarantee.
  • ‘Declaration of compliance’: one of your directors or your company secretary must complete this section, unless you have engaged a solicitor to do the work. Normally community and voluntary groups complete the section; ‘or (b) that the activity cannot be so classified but is precisely described as follows’ by inserting the main object of the company as set out in your memorandum of association. The person making the declaration must have his/her signature witnessed by one of the people listed, such as a Commissioner for Oaths or a practising solicitor.
  • Submit the completed A1 form, your signed memorandum and articles of association and the €100 registration fee (lower if the application is made on-line).

It is a legal requirement for a company limited by guarantee to use ‘Limited’ (or ‘Ltd’), or in Irish ‘Teoranta’ (or ‘Teo’), after its name in all its business letters, notices, other official publications, cheques, invoices and receipts. In certain circumstances, a company may be exempt from this requirement. The exemption is granted to a company whose objects are the promotion of commerce, art, science, education, religion or charity. The company must use its income to promote these objects and not pay a dividend to its members.

In addition, if it is being wound up, its assets must go to another company having one of the objectives listed above. The CRO provides an application form (G5) and information leaflet (number 24) with full details of what possible amendments may be required to the memorandum and articles of association for such an exemption to be granted.

Visit the CRO website.

Industrial and Provident Society

Organisations may incorporate under the Industrial and Provident Societies Acts 1893 – 1978. As the legislation requires that an industrial and provident society must intend to carry on an ‘industry, business or trade’ very often such societies will be profitmaking and allow distribution of profits amongst members. An example is a cooperative formed to supply fruit and vegetables to its members. This structure is less common within the community and voluntary sector and not generally suitable for campaigning groups.

The governing document of an industrial and provident society is known as the ‘rules’ which has many features in common with the memorandum and articles of association of a company limited by guarantee. Contact the Irish Cooperative Organisations Society for further information about co-operatives and their structures.